Are you up for looking the difference between cheque and bill of exchange? You are on the right spot to know the answer of this question. Here let’s check below the difference between both of them.
Difference between Cheque and Bill of Exchange
DRAWEE
A cheque is drawn only on the bank in which the drawer has his account. But the bill of exchange can be drawn on any person including a bank.
ACCEPTANCE
In case of cheque, there is no need of getting accepted by the bank prior to its presentation for payment. But a bill of exchange is first accepted by the drawee and after that, it can be presented for payment.
PAYABLE ON DEMAND
A cheque is always payable on demand. When the cheque is presented for payment, the banker is bound to make payment if other requirements are fulfilled.
But a bill of exchange is not necessarily payable on demand. It is for a fixed period, it can be presented for payment after the expiration of the certain period.
CROSSING
A cheque can be crossed to secure payment. But the exchange cannot be crossed.
DISCOUNTING
A cheque cannot be discounted. But in case of a bill, if the holder of bill needs money before the maturity, he can get it discontented and can receive the payment to fulfill his needs.
IMPORTANCE
A cheque is a more common and usable instrument than a bill of exchange. So the cheque is more important than the bill of exchange.
NOTICE OF DISHONOUR
If the cheque is dishonored, there is no need for notice of dishonor to the drawer by the holder of the instrument.
But when a bill of exchange is dishonored, the notice of dishonor must be given to the drawer.
DISCHARGE FROM LIABILITY
The drawer of the cheque is not discharged from liability if it is delayed to present the cheque for payment.
But if the holder of the bill of exchange does not duly present it for payment, the drawer is discharged from liability.
GRACE DAYS
A cheque is always payable on demand. Therefore, no days of grace are allowed to the banker for payment.
In case of a bill of exchange, the drawee is entitled to have three days for making payment of the bill and these extra days are known as grace days.
STOPPING THE PAYMENT
In case of cheque, the drawer can order the bank not to make payment of the cheque, prior to its presentation for payment but the drawer of the bill cannot stop the payment.
INSETS
A cheque is drawn on the printed form issued by the bank and is only in one copy. But a bill of exchange particularly a foreign bill is issued in sets.
