If you have a bearer cheque, then you can present it to the bank and get the cash amount written on it. Any person can give the cheque and collect the money written on it.
For Example: If Sanjana presents the bearer cheque at the bank counter for encashment, the amount will be paid in cash to her.
For illustration purposes only
Usually the words “or bearer” are printed on the leaf of the cheque. It can be issued to a third party in the third parties name or in the name of the firm. A bank cannot refuse payment of this kind of cheque across the counter.
Since anyone can present it to the bank and collect the cash amount written on it, these are risky in nature. So in a situation where you lose it, there may be a chance of someone else presenting it to the bank and collecting money.
If a cheque is crossed then it automatically is not a bearer cheque.3