An order cheque is payable to the person named on it and nobody else. You create one by striking out the printed words "or bearer" after the payee line.

That single deletion changes the bank's obligation: instead of paying whoever presents the cheque, it must satisfy itself that the payee is the person being paid.

Bearer versus order, in one line each

  • Bearer — pays whoever holds it.
  • Order — pays the named payee.
  • Crossed — must go into a bank account rather than being cashed.

Order and crossed are separate ideas and combine freely. A crossed order cheque is both payable only to the named payee and only into an account, which is about as tight as an ordinary cheque gets before you add account payee.

Endorsement

An order cheque can, in principle, be signed over to somebody else — the payee endorses the back and passes it on. In practice most banks in India will not accept an endorsed cheque for a third party, and an account payee marking rules it out entirely.

If you are issuing cheques, that is the useful takeaway: do not assume endorsement is available as a route. Treat the named payee as final.

If you print cheques

Where the "or bearer" text is a printed field rather than pre-printed stationery, you control it in software instead of with a pen. In ChequeMaster the bearer wording is a layout field with a per-cheque-book default, so a business that always issues order cheques sets it once and stops thinking about it.

This is one of the small ways printing beats handwriting: a pen stroke can be forgotten on any given cheque, and a default cannot.