What is a Banker's Cheque? Meaning, Validity & Example

A banker's cheque (also called a pay order) is a cheque issued by a bank on behalf of a customer. Because the bank guarantees the payment, it cannot bounce — the money is debited from the customer upfront.

How it works

You pay the bank the amount plus a small fee, and the bank issues a cheque payable to the person you specify. It is used for safe, guaranteed payments within the same city.

Example

To pay ₹2,00,000 safely for a property registration, you ask your bank for a banker's cheque. The bank debits your account and issues a guaranteed cheque to the seller.

Banker's cheque vs demand draft

• Banker's cheque — usually payable within the same city.
• Demand draft (DD) — payable across cities/branches.

Validity

A banker's cheque is typically valid for 3 months. Learn about other types of cheques.

Print regular business cheques with Cheque Print — free trial.