How To Read a Cheque in Canada – Reading & Writing Cheques

Posted on November 20, 2022 by Dylan Callaghan

Many people think cheques are going by the wayside. This does make sense as Interac e-transfers have exploded in modern times. Many people have never learned, or have forgotten how to read a cheque in Canada. 

This is because more often than not we process bill payments, fund Paypal accounts, and send electronic transactions, or now even spending cryptocurrency, without ever physically writing a cheque.

However, it's highly likely you're here at this post because you need to learn how to read and write a cheque in Canada. 

In this article, we'll tackle how to read a cheque from start to finish so that the next time you're looking to write one out or even obtain some direct deposit or debit numbers, you'll know where to look.

How to Read Canadian Cheques

Although they can vary from institution to institution, there are some universal similarities you're going to see with virtually every cheque you come across. Let's start with those. Cheque image courtesy of Chequeprint.

1. Name and Address

The information listed in this area, typically the top left of a cheque, will depend on whether or not this is a personal or business account.

Generally, if it is a personal account you will see your full name and address listed. If it is a business however, you'll often see the name of the corporation and the address of the corporation.

2. Date

Located in the top right of the cheque, this should optimally be the date you write the cheque. However, many situations will leave you writing post-dated cheques. For example one might do this when paying a monthly car payment or monthly rent payment.

In this situation, you'd simply want to put the date that you want the receiver of the cheque to be able to deposit it. If you're paying the rent on the first of every month, the post-dated dates may look like this:

01-01-2029
01-02-2029
01-03-2029

Alternatively, there is the possibility that different banks could run with different dating formats. Make sure to confirm if it's asking for DD-MM-YYYY or MM-DD-YYYY.

3. Pay to the Order of

This portion of a cheque is relatively straightforward. It is asking you to put who you would like to write the cheque to. So, if you put pay to the order of Stocktrades Ltd in this area, this means you're intending to give this cheque to Stocktrades Ltd, and they would then deposit and cash at their branch.

Make sure that when you're writing this section, you avoid making spelling mistakes and you only use the legal business or personal name of who the money is intended for. For example, hypothetically if a person wanted to transfer funds to Stocktrades Ltd, a bank could easily reject the cheque if that person put "Stocktrades.ca" instead of "Stocktrades Ltd" in this area, as although we are doing business as Stocktrades.ca, our legal business name is Stocktrades Ltd.

4. The Dollar Input to the Right of pay to the Order of

This is the numeric version of the dollar amount you want to send the person or business in the pay to the order of section. 

Including something as basic as this sounds a little silly. But you'll realize why we're doing it when we go over the next section.

The input on this portion of the cheque is simple. If you wish to send someone $100.50, simply put 100.50 in the boxes with one digit in each box.

5. The Blank Line Below pay to the Order of

In this section of the cheque, we're going to be putting the written amount of how much we want to send the person or business.

Now you may be saying "I just wrote it out in the section above!". Yes, you wrote out of the numeric version of how much you want to send. The bank literally wants you to spell it out here as well.

So, if you wanted to send a person or business $100.50, in this area of the cheque you would put:

"One hundred dollars" and place a 50 in the fractional area for cents.

If you had to send someone $3451.60 you would put:

"Three thousand four hundred fifty one" and a 60 in the fractional area for cents.

The reasoning for this? The bank wants you to spell it out so there is no manipulation by the receiving party. For example, if we didn't have this spelt out portion of the cheque and you send someone $100.50, what is stopping them from turning the 1 into a 7?

The digits along with the spelled out portion of the money being sent in a cheque is a security method to prevent this type of manipulation and fraud.

One additional note, make sure to "strike out" the remaining portion of this area to prevent additional manipulation of the cheque. For example, if you had "One hundred" in the written area, nothing is stopping someone from placing "thousand" after it. So, just draw a line through the unused portion of this space to prevent something like this from happening.

6. Memo Line

This line is completely optional, and for the most part will be left blank. The bank will find virtually no use for it, and it will mostly be used for record keeping. If you have a chequebook or physical pictures of cashed cheques on your online banking, you can reference them to see what the cheque was for.

For example, if you're writing a cheque to your landlord for January's rent, you may put "January rent payment" in the memo section of the cheque.

7. Signature Line

This area is often confusing for those who are first looking at a cheque. Why? Because for the most part, it's not labelled.

This line can be anywhere on a cheque, but for the most part it is to the direct right of the memo line. There is not much more to say about this area. If you're writing a cheque to somebody, just make sure to sign this portion.

That's About as Easy as it Gets With Writing and Reading a Cheque

It shouldn't take more than a couple minutes to fill out a cheque once you get the hang of it. It can seem intimidating at first, especially for those who feel they could put a wrong digit or two that ends up costing them money. However, as we've covered there are a few things that typically prevent errors like this.

But, we aren't done yet. Now, we need to look at the bottom portion of the cheque, as this will give us some numbers that are crucial if we ever want to use direct deposit or direct debit.

They call this the MICR line of the cheque, or the Magnetic Image Character Recognition.

How do you Read a MICR Encoding Line on a Check?


1. The Cheque Number

This is going to be the first 3 digits you see on the left hand side of the cheque. When it comes to setting up direct deposit, the cheque number is irrelevant and most banks will not ask for it. If you order a book of 50 cheques, they will often be numbered 1-50. If you order a book of 100 cheques, they will often be numbered 1-100.

Again, much like the memo line, this is used more along the lines for record keeping.

2. Transit Number

As we move left to right across the bottom of the cheque, we're now at the transit number. This is going to be a necessary number when it comes to things like wire transfers and direct deposits. 

The transit number is a 5-digit number and is linked to the facility you opened the account at. For example, if you opened a bank account at the Bank of Montreal in Toronto, and then closed that account and opened another account in a Calgary branch, you would have different numbers. The transit number will indicate your current home branch.

3. Institution Number

The institution number is a 3-digit number that will vary by financial institution, not the branch you open the account at. In the above example, it would not matter whether you opened an account at TD Bank in Toronto or Calgary, the three-digit institution number would be the same.

All financial institutions will have their own unique institution numbers. The Royal Bank of Canada's will differ from Scotiabanks, which will differ from the Canadian Imperial Bank of Commerce.

4. Account Number

This is arguably the most important part of the bottom of the cheque. That is, if you want to get paid in the event of a direct deposit. The account number is simply going to be the account that the cheque is associated with.

As the account holder, if you write someone a $500 cheque, it will pull that $500 out of the bank account number listed on the bottom of the cheque when the receiver cashes it.

Reading a Cheque FAQ

Who signs the back of a cheque?

This is often called the cheque endorsement. The only person or business that should be signing the back of the cheque is the one it is written to.

If you are writing a cheque to someone, do not sign the endorsement area. This can lead to a failed deposit and you'll have to rewrite the cheque. The endorsement line is primarily used to verify that the person depositing the cheque is the one that is intended to do so.

What are the 3 rules for writing a check?

If I were to give the 3 biggest rules for writing a cheque, they would be as follows:

  • Have the money in your bank account. If the receiver tries to cash the cheque and there is insufficient funds, you'll be hit with a fee.
  • Make sure to get the names right. Some banks will reject a cheque even based on a simple spelling mistake. This can lead to frustration and embarrassment as you have to write a new cheque out.
  • Make sure to get the numbers right. If the dollar amount and written amount are different, or there is scribbles and inconsistencies on the cheque, it will be rejected. Take your time.

Do check numbers matter?

Cheque numbers will typically reset with every book you get, and they don't have much relevance with the cheque itself. It is more so a record keeping/accounting situation where you can cross-reference the cheque number with what it was used for.

What is MICR on a check?

The MICR on a cheque is the bottom portion of the cheque which includes the cheque number, the 5-digit transit number, the 3-digit institution number, and the account number.

How do you write 25000 on a check?

You would write "Twenty five thousand" and XX or 00 above the cents portion of the cheque. In the dollar box portion to the right of the pay to the order of, you would simply write 25000.

How do you read a cheque for a direct deposit?

You would look to the bottom of the cheque and note the transit number, institution code, and account number. Alternatively, you could strike the entire cheque out, write VOID on it, and submit the void cheque to the institution trying to set up the direct deposit.

What are the five required items when writing a check?

  • The date
  • Pay to the order of
  • The written dollar value
  • the spelled out dollar value
  • A signature

Disclaimer: The writer of this article or employees of Stocktrades Ltd may have positions in securities listed in this article. Stocktrades Ltd may also be compensated via affiliate links in this post.

Dylan Callaghan

About the author

Dylan is the co-founder of Stocktrades.ca and an avid self-directed investor. He holds a portfolio of Canadian growth and dividend growth stocks, and believes that anyone, regardless of financial status, stands to benefit from investing in the stock market. His ultimate goal with his writing and the continual development of Stocktrades.ca is to create a resource that helps Canadians, and investors from around the world, make more money and retire earlier.

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