What is a Bearer Cheque? Meaning, Example & Risks
March 15, 20264 min read
A bearer cheque is a cheque that is payable to whoever holds (bears) it. The bank pays the amount to the person who presents the cheque at the counter, without verifying their identity.
How a bearer cheque works
On a cheque, the printed line usually reads "Pay ____ or bearer". As long as the word "bearer" is not struck off, the cheque is a bearer cheque and can be encashed by anyone holding it.
Example
If Ramesh writes a cheque "Pay Suresh or bearer" for ₹5,000 and hands it over, the bank will pay ₹5,000 to whoever submits it — even if it is not Suresh.
Risks of a bearer cheque
- If lost or stolen, anyone can encash it.
- No record of who actually received the money.
To make it safer, strike off "bearer" (making it an order cheque) or cross it as A/C Payee.
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