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Account payee


One of the various phrases in use which concern the crossing of cheques. The practice of crossing cheques is, though common, fraught with misconceptions. Strictly speaking the only legally binding rule is that the crossing of a cheque prevents the holder from presenting it for cash. A crossed cheque can only be paid into a bank account- though banks are generally cautious even when an uncrossed cheque is presented for cash over the counter and will tend to contact the drawer before accepting it. When a cheque is crossed with the addition of the words 'account payee' or 'account payee only' the intention of the drawer is that the monies should be paid into the account of the payee himself. Although the bank is not legally boundto take this as an instruction it could be guilty of negligence if it did not take due care in accepting the cheque.

Reference: The Penguin Business Dictionary, 3rd edt.