| FAQs on Current Accounts |
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Where can I open a current account? |
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| You can open a current account with any commercial banking institution or Islamic banking institution. |
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Can I write a cheque with a future date? |
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| The practice of issuing 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. |
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If a cheque is made payable to a company, e.g., ABC Sdn. Bhd or 'bearer', can the 'bearer' of the cheque encash it over the counter? |
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| No. Generally banks will require you to deposit it into the account of ABC Sdn. Bhd. to reduce the incidence of fraud. |
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Can a cheque be made payable to two parties i.e. A or B? |
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| Yes. A cheque can be made payable to either A or B. |
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Are "account payee only" cheques transferable? |
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| No. When a cheque is crossed "not negotiable" or "account payee only", the cheque must be deposited into the account of the payee. |
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How long is a cheque valid? |
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| A cheque is normally valid for six months from the date of the cheque, after which, the cheque is considered a ‘stale cheque’. You are advised to present your cheque for payment within a reasonable time from its date of issue to avoid incidence of the cheque being dishonoured due to insufficient funds. You are also advised to get a replacement of the cheque once the validity period is over. However, there may be situations when the drawer of a cheque limits the cheque validity period to less than six months. For such cases, the validity period will be clearly printed on the face of the cheques. |
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What should I do if I want to close my account? |
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| Give a written instruction to the bank to close the account and return all unused cheque leaves to the bank for cancellation. In addition, if you have issued any cheque which has not been cleared, you should recall the cheque. |
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Why would banking institution not accept my cheque which was altered but counter-signed by me? |
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| No alteration should be made on cheques as a safeguard against fraud. The bank reserves the right to dishonour and return cheques which in the bank's opinion, bear any alteration (whether counter-signed by the drawer or otherwise). In addition, you (the issuer of the cheque) may be charged a fee by your bank to recover part of the administrative cost. |
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What is the difference between order cheques and bearer cheques? |
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| Order cheques are cheques written to be paid to a specific person or entity (the payee) named in the cheque. Bearer cheques are cheques written to be paid to the person who holds the cheque (the bearer). An “order cheque” can be a “bearer cheque” if the words “or bearer” are not cancelled out. Sometimes, the cheque may be issued to pay “Cash". This is called a cash cheque. In general, issuing of cash cheques is not encouraged as they are exposed to risk of fraud. Some banks may charge a fee for encashment of third party cheques. |
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What is a banker's cheque? |
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| This is a cheque drawn on the bank. This means that payment is guaranteed by the bank. It is often used in situations where the payment needs to be secured, e.g., payment for a large purchase item such as a car or house. |
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Who is responsible for dishonouring my cheque? |
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| The paying bank is responsible for determining whether payment should be made to you. |
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What can I do if the cheque I banked in was returned to me for reason "account closed"? |
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| You will have to recover the amount directly from the person who issued the cheque to you. |
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What should I do if I found that some cheques are missing from my cheque book? |
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| You should report this to your banking institution immediately and request for stop payment on these cheques. |
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What is clearing day-hold? |
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| Clearing day-hold refers to the time taken for funds from the cheques which have been cleared to be credited into the payee's account. The time taken would depend on the type of cheque deposited, that is, whether the cheque is a house cheque, local cheque or outstation cheque. |
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Why do banking institutions charge customers for encashing account payee cheques? |
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| To minimise the risk of loss from open cheques due to robbery, theft and fraud, banking institutions have issued pre-printed account payee cheques. Notwithstanding this, some banking institutions may allow the accountholder and the payee to encash the account payee cheques over the counter. However, to discourage such practice, a fee is usually levied over encashment of third party account payee cheques. The fee could either be charged to the payee or the issuer of the cheque depending on the practice of the banking institution concerned. Therefore, if cash is preferred mode of payment by the payee, you should consider other forms of payment, such as via the internet, ATM machines, phone banking or Interbank GIRO service which are more secure and cost effi cient. |
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Does the banking institution have the right to request that I close my account with them? |
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| You should enquire from your banking institution the reason(s) for this. However, banking institutions have the right to close any account that is not satisfactorily operated. In addition, the conduct of the account must be in compliance with legislation such as the Anti-Money Laundering Act 2001. |
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Can my spouse operate my current account when I am overseas? |
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Yes, provided you issue a mandate to your bank and your bank approves. In some instances, only short term appointments are allowed, e.g., for six months or less.
The mandate must clearly specify:
- Identity of the mandatee
- Reason(s) and condition(s) of the mandate
- Effective period |
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What should I do if a cheque which I have deposited has been returned to me by my bank stamped "refer to drawer"? |
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| "Refer to drawer" means that clarifications have to be sought from the person who issued the cheque. The reasons may vary from case to case, such as insufficient funds in the drawer's account. In such cases, you will have to liaise with the drawer as to the next course of action. |
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If I accept a cheque denominated in foreign currency, what charges will I incur and how long would it take before I can get the money? |
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The common charges that you may incur when you deposit a foreign currency denominated cheque include commission, stamp duty, agent's charges, drawee banking institution's charges, courier charges and handling charges. Some of the charges are imposed by the overseas banking institution (agent/correspondent bank) that is involved in clearing the foreign cheque. The fees charged may vary from banking institution to banking institution. You are advised to check with your banking institution.
The clearing period for the cheque ranges from one week to one month or more. It depends on the type of currency and the country from which the cheque was issued and also prevailing laws of the paying banking institution's country. Normally, the collecting banking institution will use the service of an agent or correspondent banking institution to clear the cheque. |
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