Stale and post-dated cheques are two of the many types of cheques that can be cashed in by an individual at a bank.
Stale Cheque vs Post Dated Cheque
The difference between stale and post-dated cheque is the period in which they can be presented for payment by the individual. Stale cheques are cashed in after three months, while post-dated cheques are only shown after the specified date on the cheque.
When a cheque has a date written on it which is three months or more before the time that it is submitted to the bank for payment, it is called a stale cheque.
A post-dated cheque has a date written on it that occurs sometime in the future. The recipient of the cheque has to wait till that date in order to cash in the cheque, until then, they cannot present it to the bank.
|Parameters of comparison||Stale cheque||Post-dated cheque|
|Definition||A stale cheque is presented by the recipient for payment a considerable period after it had been issued.||It is issued in a manner where one can present it for payment only after a considerable amount of time.|
|Date printed||The date on the cheque is the date that it was issued, but it becomes stale after three months.||The date printed on the cheque is set any time in the future, regardless of how many months or years.|
|Acceptance at a bank||The bank will only accept the cheque for payment if the individual has gotten approval to present it.||The bank is obligated to accept the cheque, if the recipient presents on the date issued, or after.|
|Reason for issuing||It is a standard cheque issued to a recipient for payment of a service provided.||The issuer might not have enough funds in their bank account at that moment. Hence, a future date is set.|
|Responsibility||It is the recipient’s fault here, and not the issuer’s responsibility, for cashing the cheque late.||The issuer is only responsible in terms of having funds in their account so that the recipient can withdraw.|
What is Stale Cheque?
A cheque is considered to become stale when an individual hands it to the bank for payment after the last date to cash it has passed. The date that is printed on the cheque is the date that it was issued and is meant to be cashed before the three month period has ended.
At times, there is also an exception where the cheque can be presented to the bank if they approve of the validity of the cheque, regardless of how long ago it is dated.
A standard solution followed when a cheque becomes stale is to approach the drawer of the cheque for revalidation, where the drawer writes the present date on the cheque so that the recipient can cash it for payment.
The bank has no obligation to honour a cheque presented to them six months after the issuing date, and it is hence the fault of the holder of the cheque. The recipient of the cheque is the sole person responsible in the case of a cheque becoming stale.
“if a cheque has been issued and is dated on 20/01/2020, then it is valid till 20/04/2020, which is precisely three months after the issuing date and is referred to as the final payment date by the bank.”
What is Post Dated Cheque?
The drawer of the cheque presumably sets the payment date of the cheque in the future, and the holder of the cheque can only present it to the bank on or after that date (or within three months of the payment date).
The issuer of the cheque dates the cheque in this manner because they might not have enough funds within their account to provide the payment at an earlier notice, and hence they date it in the future to amass the money and pay the recipient for their service.
The above also shows that only the issuer or drawer of the cheque is responsible here, as they have to ensure that they can make the transaction on the payment day.
Also, a fascinating key point about post-dated cheques is that in case the drawer of the cheque does not have all the funds amassed, and still has to pay the recipient, they can do so in the manner of instalments. For example –
“If Jack owes a total sum of 5000 rupees to Ram and is unable to write a cheque for the amount, he can write five cheques of 1000 rupees, each dated a month apart, and pay in the form of instalments.”
Main Differences Between Stale Cheque and Post Dated Cheque
- Stale cheques are outdated cheques presented to the bank after the payment date has already passed. Post-dated cheques are dated in such a way that they can only be cashed in on a period ahead in the future.
- Cheques become stale after three months from the issuing date. A post-dated cheque can be dated for any time in the future; it may be months or years from the date of issue.
- The only person responsible in case a cheque becomes stale is the holder of the cheque. In case of a post-dated cheque, the bank can, and only the issuer of the cheque is held responsible.
- Stale cheques are issued as standard cheques for providing payment for any service. Post-dated cheques are dated in that manner because the issuer might not have enough funds in their bank account at that moment.
- Banks are not obligated to honour stale cheques, while in case of post-dated cheques, the bank must accept the cheque.
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