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What is the difference between Cheque and Promissory note?


Let’s find out the difference between Cheque and Promissory Note.

S.No.
Point of differences
Cheque
Promissory note
1.
What is cheque and promissory note?
Cheque is an instrument which is presented in bank to instruct the financial institution to pay cash to bearer of cheque or to payee name mention on it.
Promissory note is a written promise given by drawer to payee which states that the drawer will pay the fixed amount in fixed future date.
2.
Who can issue cheque and promissory note?
A person who has a bank account can issue cheque to bank which instruct the bank to pay the cash from his account.
A person who takes a loan can write promissory to lender which states that the borrower is promising to pay certain some of money to lender in certain date in future.
3.
How many parties involved in cheque and promissory note?
There are three parties involved – drawer, drawee and payee. Drawer is a person who writes cheque and having a bank account in the bank.
Drawee is a person who demands cash to drawer so, that drawer make a cheque in favour of drawee. Payee is a drawer’s bank who give cash from drawer’s bank account after seeing the cheque drawn by drawer.
There are two parties are involved in making a promissory notei.ie. drawer and payee. Drawer is a person who makes promise in writing to pay certain cash in future date. Payee is a person or lender who receives fixed cash in fixed future date.
4.
Can drawer make payment to himself in cheque and promissory note?
Yes drawer can make payment to himself by writing “self” in “pay to -----“. It is like “pay to self”.
No drawer cannot be the drawee or make payment to himself like in cheque.
5.
Can cheque and promissory note are conditional or unconditional?
In writing a cheque the drawer can make a condition for payment to drawee. The drawer can make two parallel lines in top of the left side of a cheque or writing a/c payee in between two parallel lines which shows that payment is transfer to drawee bank account only not in cash form.
In promissory note there is unconditional promise make by maker to payee.
6.
For which instrument bank account is necessary?
To draw a cheque, the drawer must have a bank account. The bank issues cheque to bank account holder which provides facilities to account holder to withdraw cash from his account.
To make a promissory note, the drawer doesn’t need any bank account in any bank.
7.
Can we stop the payment of cheque or promissory note after issuing it?
The drawer of the cheque can give notice to the bank to stop the payment after issuing the cheque.
In promissory note the drawer can’t do anything if promissory note is issued to payee.
8.
Is cheque or promissory note is written on printed paper or ordinary paper?
Cheque is a printed paper issued by bank to its customer .
Promissory note is written by drawer in simple paper which is signed by drawer.


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