What is a Post Dated Cheque: Meaning, Validity, Example, & How to Write It?

At a young age, you may have seen your parents write a cheque for a future date. These cheques are valid and can be used for future payments. Such cheques are known as post-dated cheques, where the payee (the person to whom money is to be paid or the person encashing the cheque) can encash it at a later period. 

Continue reading this article to learn about post-dated cheques, how post-dated cheques work, and more. 

What is a Post-Dated Cheque?

A post-dated cheque is a cheque with a future date mentioned on it. In post-dated cheques, the payer/ drawer (person who needs to give/ pay money to the payee or the person writing the cheque) writes a future date on the cheque to ensure the payee receives the payment on or after the desired period mentioned in the cheque.

The date provided on the post-dated cheque can be any future date, considering the need of the company or individual. The banks can honour this cheque on or after the mentioned date only. 

Validity of a Post-Dated Cheque

As per the RBI circular on post-dated cheques, it remains valid for three months from the date mentioned on the cheque. 

Thus, for example, if you have issued a post-dated cheque dated 15 April 2025, it can be encashed with the bank until 14 July 2025. After this period, the cheque will no longer be valid. 

How do Post Dated Cheques Work?

The drawer issues a post-dated cheque with a specific future date on it instead of the current date. Like other cheques, you cannot encash a post-dated cheque before the date mentioned on the cheque. This cheque acts as a commitment towards providing a specified fund at a particular date, thereby offering credit from the drawer to the payee. 

Most importantly, when a post-dated cheque is issued, the drawer must ensure sufficient funds are maintained in the account. If a cheque is issued for payment on a future date and there are insufficient funds in the account, the cheque will bounce back and lead to penalties charged by the bank. 

From the perspective of a payee, acceptance of a post-dated cheque requires trust in honouring their commitment. The cheque guarantees that the amount mentioned will be paid in the future. Thus, it often enables transactions relating to instalment-based purchases, rental payments, or business deals with trusted parties.

How to Write a Post-Dated Cheque?

A post-dated cheque is written similarly to other cheques. There is no particular method of writing a post-dated cheque. Make sure to provide the name of the payee, the amount to pay in words and numbers, and your signature. The only significant difference that exists with post-dated cheques is that in the cheque’s date field, provide a future date instead of the date on which you are filling up the cheque. 

Ensure that you pick a date when you will definitely receive funds so that your payments are safe and secure. Furthermore, if you have insufficient funds, opting for the post-dated cheque will enable you to arrange funds within the stipulated time to provide payment assurance to the payee. 

Post-Dated Cheque Uses

The several uses of a post-dated cheque are as follows:

• Paying Loan EMIs

Nowadays, while opting for a loan, lenders usually ask to pay advance cheques according to the loan tenure. Thus, if you opt for a loan with a tenure of 3 years, you need to provide 36 post-dated cheques. These cheques are then further deposited into respective accounts each month for easy collection of loan EMIs. Hence, these post-dated cheques guarantee future payments without the need for regular reminders. 

• Arrangement of Deferred Payment

Opting for a post-dated cheque guarantees commitment towards future payments within a specified time frame when you expect to have enough funds in your account. This is a convenient option if you have seasonal or periodic income, especially if you are a professional or business owner. 

• Scheduling Payments

One of the main uses of a post-dated cheque is scheduling payments for a future date. For instance, if you need to pay maintenance on a flat but visit it only once or twice a year, handing over a post-dated cheque is a very convenient option. The building secretary can then encash the amount within the time frame. 

• Business Transactions

As a business owner, you can opt for post-dated cheques to build good relationships with customers and suppliers. This also ensures continuity in the functioning of the business, as your cash flow remains unaffected. 

Post-Dated Cheque Example

Let us understand the concept of a post-dated cheque more clearly with the help of an example. 

Suppose Amit needs to pay a supplier Rs. 2,000 on 21 May for the transaction he made about 40 days ago. But Amit has insufficient funds in his account to pay the supplier, so he decides to pay two Rs. 1,000 cheques separately, one dated 20 June and the other dated 20 July. This way, Amit can arrange for funds to be paid to the supplier by 20 June and 20 July. 

The supplier has agreed to Amit's payment conditions. However, the supplier cannot present the post-dated cheque before 20 June. The bank will not honour the post-dated cheque if it is presented before the date mentioned on it.

Thus, the supplier can encash and receive the payment of the first cheque of Rs. 1,000 dated 20 June only between 20 June and 19 September and the second cheque of Rs. 1,000 dated 20 July between 20 July and 19 October.

Penalty for Dishonouring a Post-Dated Cheque

In India, the Negotiable Instruments Act, 1881 governs the laws regarding post-dated cheques. In case of dishonouring a post-dated cheque, here are the penalties that the authorities may impose:

• Imprisonment for up to two year or
• Fine charged up to twice the amount mentioned on the cheque or
• Combination of both of the above

Additionally, if a post-dated cheque is dishonoured, issuing a legal notice by the payee within 30 days of dishonour is a must. The issuer must also respond within 15 days from the date of notice. 

Alternatives for Post-Dated Cheque

Post-dated cheques are useful for deferring payments. However, you can make deferred payments through the following ways instead of issuing a post-dated cheque:

• Schedule the transfer of funds electronically through Internet banking such as IMPS, NEFT, or RTGS
• Auto debit mandate for making recurring payments relating to rent or EMIs

Post-dated cheques have several benefits. They are an ideal instrument if used and planned well. Additionally, businesses can continue their operations without shutting down because of inadequate funds. Thus, from the viewpoint of payers, the ideal way of preventing payments from being released early is to issue post-dated cheques.

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