GUARANTEED CHEQUE Meaning and
Definition
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A guaranteed cheque, also referred to as a certified cheque, is a form of financial instrument frequently used in banking transactions. It is a cheque that the issuing bank guarantees to pay, as long as the funds are available, by setting aside the necessary amount in the account of the cheque issuer.
When a person requests a guaranteed cheque, they typically provide the issuing bank with the full amount of the cheque, along with any applicable fees. The bank then verifies the account balance and places a hold on the specified amount to ensure the funds are available to honor the cheque when it is presented for payment. The bank adds a special stamp or mark on the cheque to indicate its guarantee and make it distinguishable from regular cheques.
This type of cheque is often preferred for high-value transactions, as it offers a level of assurance to the recipient that the payment will be secure. Unlike regular cheques, which may bounce if the account has insufficient funds, a guaranteed cheque provides the payee with confidence that the funds are already allocated and reserved. It eliminates the risk of insufficient balances or insufficient funds notifications that could cause delays or complications in business transactions.
Overall, a guaranteed cheque plays a crucial role in ensuring the financial reliability and authenticity of a payment, bringing peace of mind to both the cheque issuer and the recipient.
Common Misspellings for GUARANTEED CHEQUE
- fuaranteed cheque
- vuaranteed cheque
- buaranteed cheque
- huaranteed cheque
- yuaranteed cheque
- tuaranteed cheque
- gyaranteed cheque
- gharanteed cheque
- gjaranteed cheque
- giaranteed cheque
- g8aranteed cheque
- g7aranteed cheque
- guzranteed cheque
- gusranteed cheque
- guwranteed cheque
- guqranteed cheque
- guaeanteed cheque
- guadanteed cheque
- guafanteed cheque
- guatanteed cheque
Etymology of GUARANTEED CHEQUE
The word "guaranteed" originates from the Old French word "garantir", which means "to warrant or safeguard". It is derived from the Frankish words "warjan" (to take care or defend) and "rant" (a pledge or agreement). The term "cheque" comes from the Middle English word "cheke", meaning "a written document". Therefore, the phrase "guaranteed cheque" combines the concept of assurance or security (guaranteed) with a written document used for financial transactions (cheque).
