The difference between a bank cheque and a private cheque
A bank cheque is a cheque drawn and officially signed by a bank. In addition to the drawing bank, the paying bank is stated on the cheque.
A private cheque is drawn by a private person or company on credit against their accounts. In such a case the cheque is signed by a private person or company (company name and signatures). A private cheque can only be cashed in if the drawer’s (account holder’s) account has sufficient cover. Private cheques are sent to a foreign bank for collection to verify they are covered by the funds in the account.
Cheque as means of payment
- based on an agreement between the buyer and the seller
- risky, unsafe and old-fashioned
- always the most expensive method of payment for the recipient
- may lack cover and/or be outdated.
You should not accept a cheque as payment from a person or company you do not know. As the use of cheques has decreased, frauds and forgeries have become more common.
Crediting a cheque to an account
Nordea only accepts bank cheques and private cheques from customers that have an account with Nordea.
Cheques are accepted for collection. The funds from cheques accepted for collection are credited to the customer’s account only after a foreign bank has delivered cover for the cheque. This process may take weeks.