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Using a post-dated cheque is actually pretty easy. Instead of putting the date you write the cheque on the date portion, you put the date you wish for the cheque to be deposited and the money withdrawn from your chequing account. This date is specific to you, and there aren’t many rules as to which date you can choose.
How These Types of Cheques Work
Post-dated cheques come in really handy when paying for things like monthly fees or rent. This is because you can write a year's worth of cheques at a time and submit them in advance. Due to banking rules, these cheques can’t be deposited before the date shown on the cheque, so you don’t have to worry about the payment coming out too early.
In the rare case that a cheque is deposited too early, then you should contact the bank immediately. They can put the funds back into your account until the date of the cheque, as well as reimburse you for an overdraft or NSF fees if any occur.
You might be wondering why you wouldn’t just use the date you wrote the cheque instead of post-dating it. There are two main reasons for that. The first reason is that post-dating gives you the ability to control the date that the cheque is cashed. Otherwise, the recipient can cash the cheque anytime they like. The second reason is that cheques become stale dated after 6 months. This means that they’re too old to cash. Having a post-dated cheque corrects this problem.
It’s also important to note that cheques are meant to be used with your chequing account. You can’t use cheques with your savings account.
Legality of Post-Dated Cheques In Canada
In short, post-dated cheques are legal in Canada and considered a form of legal tender. However, the same isn’t said for the rest of the world. In the US, most states allow for post-dated cheques, but not all of them. That said, the rules for post-dated cheques in the US are much different than those in Canada.
In Canada, the only penalty you get for a cheque bouncing is an NSF fee of around $40. In the US, this is different. It’s actually illegal to write a post-dated cheque in the US when you don’t have the required funds in your account, and you could face legal penalties. Also, US banks don’t have to wait until the date stated on the cheque to cash it; they can do so at any time.
Another thing with such cheques in the US is the validity period. While in Canada, the post-dated cheque validity is six months, it’s only three months in the US. This means it becomes a stale-dated cheque much sooner.
How To Write A Post-Dated Cheque
Writing a post-dated cheque is very similar to a regular cheque. The main difference is the date. That said, here are the written instructions you should follow when writing the cheque.
- In the space indicated for the date, you’re going to have the future date written instead of today's date.
- In the namespace, you’re going to write the name of the payee.
- In the box indicated for the amount, you’re going to write the amount in numbers (Ex. $200)
- On the amount line, you’re then going to rewrite the amount but in words this time ( Ex. two hundred dollars)
- You then sign the cheque on the signature line.
On the cheque, you’re also going to notice a space to write a memo. While you don’t have to put anything here in this space, many people choose to write what the cheque is for. This is especially common with post-dated cheques because many cheques can be written at the same time. This can distinguish the cheques and make sure that the correct cheque is cashed at the right time.
Writing Post-Dated Cheques For Rent
When it comes to writing a post-dated cheque for rent, memos are common. This is because most people choose to write a year's worth of cheques at a time. The memos are then used to keep track of the months of rent you’ve written cheques for. However, this isn’t the only method used for rent payments, and the landlord can’t dictate your method of payment.
When you start writing the cheques, the most common date you’re going to put on there is the first of every month. Then, in the memo section, you’re going to write the month for which the rent payment is made. For example, if you’re writing a cheque for September rent, then the date is going to be September 1, 2025, and the memo will say something like September’s rent or September 2025’s rent.
Example of a Post-Dated Cheque
The simplest way to understand how a post-dated cheque works is to look at an example.
With this particular post-dated cheque, we can see that the future date is July 30, 2025. We can also see the amount the cheque is written for is $1,200. This amount is noted numerically and in writing. The recipient's name and the payee's signature are also noted on the cheque.
How To Get Post-Dated Cheques
Post-dated cheques aren’t specific types of cheques that are given out. These are standard cheques that you post-date yourself. Certified cheques that you purchase from your bank are unable to be post-dated because the funds are guaranteed as of the day they were purchased. However, they will be cheques dated by the bank, not you.
Money orders, which are similar to both cheques and certified cheques, are unable to be dated. However, the sender can be charged if a money order isn’t cashed within a certain time period.
Rules of Post-Dated Cheques
There aren’t many rules to post-dated cheques that differ from normal cheques other than a cheque can’t be cashed before the date mentioned on it. Like other cheques, it becomes stale-dated after 6 months and will need to be rewritten. There are no provincial regulations for cheques in Canada. All of the rules are Canada-wide.
Disadvantages of These Types of Cheques
While there are many positives to considering post-dated cheques, it’s important that you also consider the disadvantages. These advantages don’t just apply to the person writing the cheque; they can also apply to the recipient.
The first thing about post-dated cheques is that they can be hard to track. If the recipient has the cheque and hasn’t cashed it yet, it can be easy to forget why you wrote it and who you wrote it to. The easiest way to combat this is to keep a record. By keeping a record of all of the cheques you’ve written and what they were for, then you don’t have to stress about what happened to them until you see the encashment date.
Another issue with post-dated cheques is that they can easily be dishonoured. What does this mean exactly? Well this means that the payee could not have sufficient funds in their account to cover the cheques, and then the cheque bounces. This means that the recipient won’t receive their money, and the payee will be charged an insufficient funds fee, also known as an NSF fee.
Another risk to consider with a cheque is that they are a physical document. This means that it’s easier for them to be lost or stolen, which can put the funds at risk. It may also mean that the cheque never gets cashed, and a new cheque will have to be written. In rare cases, the funds can be cashed by someone else, which means both the payee and the recipient are out of money.
Ante Dated Cheques
On the opposite side of the coin of a post-dated cheque is an anti-dated cheque. These types of cheques are dated before the current date. These aren’t common and typically happen when a wrong date is written. That said, if this happens, then the same cheque rules will apply. It’s good for up to 6 months from the date written on the cheque, not the date it was written. If the date was more than 6 months in the past, then a new cheque is needed before it can be cashed.
How Early Post-Dated Cheques Can Be Cashed
As you might have guessed, a post-dated cheque can’t be cashed any earlier than the date written on the cheque. As we mentioned earlier, this does happen on occasion by accident but can easily be reversed by the financial institution, along with any fees that may have been charged.
What Is Considered A Post-Dated Cheque
Any cheque that has a date on it further in the future than the date it was written is considered to be post-dated. Even a date as close as tomorrow would be seen as post-dated because you’re making future payments.
Reasons To Use A Post-Dated Cheque
The most common reason nowadays to use post-dated cheques is to pay rent. However, they’re often used for many different things,including:
- Bills
- Monthly extra fees
- Loan EMIs (Estimated Monthly Installments)
Issuers and businesses like them because they’re great for making sure future payments are made on time. However, another option that’s now also common instead of post-dated cheques is monthly preauthorized payments. These are similar and cheques and are great for giving assurance as well.
Alternative Payment Methods
Cheques used to be a really popular way to make payments; however, technology has now taken over a little. With internet banking, you can set up post-dated payments, as well as automatic electronic payments, and make instant payments whenever you like.
With online banking, you can set up transactions with all of your payees to make your payments in certain amounts on certain days. This is easier to track than a post-dated cheque because it doesn’t put any of the funds in the hands of the recipient until the day of deposit. It also allows you to cancel the payment at any time without involving the bank.
Interac e-transfers are also a common alternative to cheques. They allow the payee to make fast payments in large amounts that can be received by some recipients instantly. Others have to wait an hour or so for their payments to arrive. That said, most banks only allow transactions of up to $2,500 to $3,000 per day via e-transfer. Cheques allow for a lot more.
We briefly mentioned another option, which is preauthorized payments. With this process, there’s no wait time for the payee when your payment is withdrawn. That’s the key difference, though. Just like with a cheque, you have to sign to confirm the amount payable and the recipient can receive assurance of payment in advance. If the funds aren’t in the account on the due date, though, then a NSF fee will be charged.
Final Thoughts
While post-dated cheques aren’t as commonly used as they used to be, many people still use them for large transactions or for long-term transactions like rent. This is because they’re simple, provide a physical method of payment, and can allow the funds to come directly from your bank account. For the most part, the only difference between this form of payment and electronic methods is that it’s physical, not just digital.
One of the great things about cheques is that there is no limit to the amount you can withdraw with them. While debit and e-transfer transactions have limits, these do not. This is why they’re preferred for larger transactions, and they’re much simpler to use than just cash. It’s not always ideal to carry cash in large amounts.
