Cheques are the most common mode of payment issued by banks. It is a convenient payment mechanism that continues to be popular in the digital age. A cheque's operation is straightforward: the account holder issues a correctly filled cheque to the bearer, who can either cash it or deposit it in the bank, where the money is credited to the account.
Canceling cheques, the validity of a paycheck, bounced cheques, post-dated cheques, and so on are some of the most well-known words associated with cheques. In this blog, we are going to talk about Post-Dated Cheques in the UAE.
A cheque has only a few fields, such as Name, Amount, Date, and Signature. Every field on a check is significant and must be filled in carefully. A cheque is called a Post-Dated Cheque if the date on it is in the future (PDC Cheque). This means that the check can only be withdrawn on the date specified on the check.
For example, if today is 15.03.2022 and the date on the check is 01.05.2022, the check can only be paid on or after that date. Post-dated cheques are the name for these types of checks.
A post-dated cheque is written in the same way as a regular check. The name of the bearer (the person to whom the cheque is written), the amount of the cheque, the date it was written, and AC Payee in the upper left corner if the amount is to be credited to the bearer's account are all required information.
On a PDC cheque, the Date seems to be the most significant and distinct factor. Give yourself a deadline for depositing your check. Last but not least, double-check the information provided and sign the check.
These are the following rules for post-dated cheque:-
Though there is no rule against the use of post-dated cheques, it is illegal to issue a cheque if the payer does not have sufficient funds to cover the amount stated on the cheque.
Unless and until the payer informs the bank that the cheques cannot be cashed before the designated date, the payee can present the cheque at any time. The payee can deliver the cheque at any time, and if the payer has not given the bank any instructions, the bank is required to honor the cheque, which means the bank is free to pay the cash to the payee even before the specified date.
Nothing is guaranteed when a future-dated cheque is written. The bank must get written instructions, and the bank can direct us on how to do so. Furthermore, different banks have various policies for how long they will track to prevent early payments, which are all dependent on the user paying a fee for this monitoring.
While the term "Post-Date Cheque" describes the reason for its use, the conditions in which it can be utilized are as follows:
The cheque is valid for six months in the UAE from the date shown on the cheque. The same can be said for a post-dated check.
Read More: Cheque Book Request from Bank in UAE
Post-dated cheques are provided to banks or financial institutions as part of the loan documentation, in addition to regular payments. When a consumer defaults on a loan payment for an extended length of time, banks deposit the checks in order to cash them. If the account has funds, the bank or financial institution will cash it; otherwise, the account holder will be charged with a cheque bounced.
The account holder is responsible for the protection of a PDC cheque. Regardless of whom the cheque is issued to, whether a financial institution or an individual, cash must be accessible in the account at the time of withdrawal, or the account holder may be subject to legal cheque bouncing charges in the UAE.
In the United Arab Emirates, account users have access to an incredible way known as a post-dated Cheque. This ensures that they do not miss any future payments. To avoid problems, the account holder must guarantee that funds are present in the account at the time of withdrawal. To know more about the Post-dated Cheque in UAE, connect with Dhanguard. We will gladly assist you in each and every manner!
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Yes, a foreign entity can open business account in the UAE. The registration of any organisation in the UAE is generally an easier and cost-effective way.
The requirement for opening any bank account in the UAE vary from one bank to another. Although, the existence of a major director or shareholder is generally required.
A limited company should have a dedicated bank account because they have a separate legal entity.
The benefits of having business account includes tracking of the expenses, easy calculation of the tax liabilities as well as management of cash flow.
Yes you can open a business account in various major currencies of the world other than the UAE dirhams.
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