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Introduction to Certified Cheques

In certain commercial transactions, the payee of a cheque may ask the payer of the cheque to have it certified by their bank as being good for payments. These cheques are referred to as confirmed cheques or certified cheques.

It is important to understand that a confirmed or certified cheque is certified as good to pay, by a bank, on a single cheque from a chequebook issued by the bank to a customer.

A confirmed cheque is confirmed for a definite period, the confirmation can be canceled, the confirmed cheque can be stopped and the confirmed cheque is presented through clearing, for payment.

In a sense, therefore, a confirmed cheque assumes the characteristics of a demand draft, during confirmation. Banks debit the confirmed cheque amount and hold the amount in a payable suspense account, pending clearance of the cheque.