What is a post-dated cheque? Can I deposit or cash a post-dated cheque? Is post-dating a cheque illegal?

A post-dated cheque is a cheque issued with a written date in the future or dated after the date of issue.

Section 13 (2) of Bills of Exchange Act 1949 (Act 204)

A bill is not invalid by reason only that it is ante-dated or post-dated...

If a bank notices a post-dated cheque presented for payment before the date appearing thereon, the cheque will be returned marked post-dated or the bank will hold on to the cheque until it is able to be cashed in. The greatest danger lies in the banker paying a post-dated cheque and subsequently dishonouring another cheque which ought to have been paid but had to be returned due to lack of funds.

Therefore, the practice of issuing or accepting a post-dated cheque is not encouraged. This is to avoid any incidence of returned cheque due to insufficient funds and the resulting penalty charges. It causes inconvenience to all parties - drawer, drawee and payee.

The following consequences may also ensue before the due date:

  • Drawer may stop payment [Section 75(a) of Bills of Exchange Act 1949 (Act 204)]

  • Drawer may die [Section 75(b) of Bills of Exchange Act 1949 (Act 204)] or become mentally incapacitated

    Section 75 of Bills of Exchange Act 1949 (Act 204)

    Revocation of banker' s authority

    75. The duty and authority of a banker to pay a cheque drawn on him by his customer are determined by:

    (a) countermand of payment;

    (b) notice of the customer's death.

  • There may be a garnishee order on the drawer's account.

With the advent of internet banking, customer can set up scheduled automated payments or direct credit. Simply call your bank for more information.

  1. Drawer means the person who draws a cheque.

  2. Drawee banker or paying banker means the banker on whom the cheque is drawn.

  3. Payee means the person to whom the cheque is drawn payable.

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Knowledge Base ID :   1381
Last Reviewed :   November 14, 2016
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