A post-dated cheque lists a specific future date for when it can be cashed. Whoever is writing and issuing the cheque chooses this date and fills out the rest of the cheque accordingly. The cheque cannot be cashed before the indicated date.
This type of payment method is used when someone requires a period of time between when they write the cheque and when it's cashed. It could be because they won't have the required funds in the account until a future date, or simply because they're paying for something in advance.
Whatever the reason, post-dated cheques can be a valuable tool for banking in Canada. To help you understand them better, we've created this guide to how post-dated cheques work.
Key Takeaways
- A post-dated cheque has a future date written on it so it can't be cashed until that specific day.
- You write a post-dated cheque the same as a normal cheque, except you add a future date rather than today's date.
- Post-dated cheques are legal in Canada.
Post-dated cheque vs. regular cheque
The key difference between a regular cheque and a post-dated cheque is the date that you write on it – a post-dated cheque shows a future date, while a typical cheque shows the date when you wrote the cheque.
The future date is key as it means that the funds cannot be taken from your chequing account until the day you've specified here. This can be helpful for situations like the following:
- Paying rent
- Making a loan repayment
- Preparing scheduled bill payments
People often use post-dated cheques to pay their rent upfront, a move that signifies to the landlord that they're a serious, responsible tenant. It also provides the landlord with assurance of payment which, in turn, gives them peace of mind.
How to write a post-dated cheque
Writing a post-dated cheque is quite simple and requires just a few steps. It's very similar to how you'd typically write a cheque, with one big difference.
- Using the space indicated, write the future date on which you'd like the cheque to be cashed. If you write the cheque on February 1, 2024 but want it cashed on March 15, 2024, you write "March 15, 2024."
- Write the payee's name on the recipient line.
- Write out the amount in numerical form in the amount box – for example, write "$500" instead of "five hundred dollars."
- Write out the amount in words on the amount line– this time, write it as "five hundred dollars" instead of "$500."
- Sign the cheque on the signature line.
You may also choose to write a note in the "memo" section, but this isn't a necessary step. Here are a few examples of what you may want to indicate in the memo section:
- The specific month your rent payment is for
- The account number for the bill you're paying
- Your child's name, grade, and homeroom number if you're paying school expenses
Is it legal to post date a cheque?
Post-dated cheques are legal to write and use in Canada. In the U.S., however, each state has different laws and guidelines regarding post-dated cheques – it can be illegal to write such a cheque if you don't have the proper funds to cover the cheque, and U.S. banks are allowed to cash a cheque before the indicated date.
In Canada, merchants and individuals aren't allowed to cash this type of cheque before the indicated date. If, for some reason, a recipient does cash a post-dated cheque, you can ask your bank or financial institution to reverse the transaction. They may even reverse any NSF fees you were charged.
For more information, you can read the federal government's guidelines here: Paying by cheque.
Do you use post-dated cheques?
While post-dated cheques aren't as commonly used as they once were, many Canadians still rely on them to pay rent and other such bills. Once you understand how they function and how to write one, you may find them to be quite a convenient financial tool.
Have you written or cashed a post-dated cheque lately? What was it for?
We appreciate all reader feedback, so please leave a note in the comments section below to let us know about your experiences.
FAQ
Are post-dated cheques legal in Canada?
Yes, post-dated cheques are legal here in Canada. Laws in the U.S. are a bit different, though, and you should read the laws for your state before writing or cashing a post-dated cheque.
Can you deposit a post-dated cheque before the date shown?
No, you can't cash a post-dated cheque early. You can only cash these cheques on or after the date specified by the issuer. Otherwise, the issuer can request that their bank reverse the payment.
Do all banks allow you to write post-dated cheques?
Most Canadian banks allow their clients to write post-dated cheques, but it's not a universal practice. You'll need to research and read up on your bank's policies regarding post-dated cheques before you try to issue or cash one.
How long are post-dated cheques valid for?
Post-dated cheques are only valid for 6 months after the indicated date. After 6 months, it's referred to as a "stale cheque." This is true for nearly all types of cheques, except for certified cheques.
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