Cheques come in different forms. The most common form is the personal cheque, which is issued by the bank itself, who will also be in charge of making the payment; that's right: The customer must have filled it in with their details, the amount to be paid and their signature.
Another form is the certified check, with which the entity itself can guarantee the customer's solvency. The certified check provides even more security and speeds up payment since, if there are no funds in the customer's account, the bank would simply refuse to issue it.
On the other hand, if the cheque is a bank cheque, it will be signed by the bank itself, who will also be in charge of paying it. Of all the types of cheque, this is the one that offers the highest level of guarantee: it is guaranteed and validated by the bank itself.
In addition, there are non-negotiable cheques, which will name the payee (an individual or company), and which cannot be cashed by any other person, unless they are order cheques; in that case, a third party can withdraw the cash (which is known as an endorsement). On the other hand, if the cheque is a bearer cheque, this means that anyone who takes it to the bank will be able to cash it, with all the risks that this entails: if the cheque is lost, whoever finds it can withdraw the money.
To reduce this risk, a crossed cheque cannot be cashed in cash, and it can only be credited to an account; therefore the person or company cashing it can always be identified.
Differences between a cheque and a promissory note
The promissory note is a document that is delivered to an individual or company in order to pay them an amount of money within a period of time. Although it sounds the same as a cheque, it has several differences.
To begin with, a cheque does not have a deadline for being cashed. A promissory note, however, indicates a date from which payment will be made. This provides even more security to the payee of the promissory note, and also allows the issuer to choose a payment term that is convenient for them.
In addition, unlike a cheque, a promissory note may be backed by a third party (which must be reflected in writing).