Cash vs. Cheque: What's the Difference?
Edited by Harlon Moss || By Janet White || Updated on October 26, 2023
Cash refers to physical currency such as coins and banknotes, while a cheque is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer.
Key Differences
Cash is the most immediate form of payment and is accepted universally. It represents physical currency, including coins and banknotes, that is recognized by the government as a medium of exchange. Cash transactions are typically straightforward and immediate, with the payer handing over the exact amount to the payee, who receives it instantly. Cash is often preferred for its simplicity, ease of use, and immediate settlement of transactions, enabling prompt exchanges and purchases.
Contrarily, a cheque is a document that orders a bank to pay a specified amount of money from the account of the drawer to the bearer. It is a form of non-cash payment that necessitates processing by a bank. Unlike cash, a cheque is not immediate; it requires time to clear, and the recipient can only access the funds once it has been processed, which might involve a waiting period. Cheques offer a level of security that cash does not, as they can be tracked and are not useful to a finder or thief without proper endorsement.
While cash is universally accepted and facilitates quick transactions, it can be risky to carry in large amounts due to loss or theft. The use of cash is also limited to face-to-face transactions unless it is sent via mail, which entails its own risks. Cash transactions are also harder to trace, making cash suitable for anonymity but inconvenient for record-keeping and financial management, as it does not automatically provide a transaction trail.
In contrast, cheques leave a paper trail, making them more suitable for those who need or desire detailed financial records. They are a safer option for paying large amounts as they can be made payable to a specific person or entity, reducing the risk of theft or loss. However, cheques are not universally accepted, especially in a retail context, and can be inconvenient due to the time it takes for them to clear and the possibility of bouncing if there are insufficient funds in the drawer’s account.
In conclusion, the primary difference between cash and cheque lies in their form, immediacy, and traceability. Cash is tangible, instant, and somewhat untraceable, whereas a cheque is a written order, requires processing time, and leaves a detailed transaction record.
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Comparison Chart
Form
Physical currency
Written document
Immediacy
Immediate
Requires time to clear
Acceptance
Universally accepted
Not universally accepted
Traceability
Hard to trace
Leaves a paper trail
Risk
Risk of loss or theft
Safer, especially for large amounts
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Cash and Cheque Definitions
Cash
Money in any form, especially that which is immediately available.
The company keeps a reserve of cash for emergencies.
Cheque
A tool used to make payments or settle debts through a financial institution.
The landlord prefers rent to be paid by cheque.
Cash
To convert a check or other form into cash.
She cashed her paycheck at the bank.
Cheque
A document that orders payment of money drawn by a depositor.
She received a cheque as payment for her services.
Cash
Money in the form of bills or coins; currency.
Cheque
A payment method used instead of cash or credit cards.
The charity sent cheques to the beneficiaries.
Cash
Liquid assets including bank deposits and marketable securities.
Cheque
A written order directing a bank to pay out a specified sum of money from a specific account.
He wrote a cheque for the total amount due.
Cash
Money paid in currency or by check
Paid in cash.
Cheque
A written order that is not cash but can be converted to cash.
He opted to receive his winnings in the form of a cheque.
Cash
Any of various Asian coins of small denomination, especially a copper and lead coin with a square hole in its center.
Cheque
Variant of check.
Cash
To exchange for or convert into ready money
Cash a check.
Cash in one's gambling chips.
Cheque
A draft directing a bank to pay money to a named person or entity.
I was not carrying cash, so I wrote a cheque for the amount.
Sometimes abbreviations are used (which would be explained on the statement) and only the last three figures of the cheque number may be given. ‘Sundries’ are cash or cheques paid into the account.
You can avoid dealing with paper cheques — written or printed — by paying your bills online.
The daily cheque clearings began around 1770 when bank clerks met at the Five Bells (a tavern in Lombard Street in the City of London) to exchange all their cheques in one place and settle the balances in cash.
Cash
(uncountable) Money in the form of notes/bills and coins, as opposed to cheques/checks or electronic transactions.
After you bounced those checks last time, they want to be paid in cash.
Cheque
Obsolete form of chequy
Cash
Liquid assets, money that can be traded quickly, as distinct from assets that are invested and cannot be easily exchanged.
Cheque
See Check.
Cash
Money.
Cheque
A written order directing a bank to pay money;
He paid all his bills by check
Cash
Cash register, or the counter in a business where the cash register is located.
Let me just bring these to the cash for you.
Cheque
Withdraw money by writing a check
Cash
An instance of winning a cash prize.
Cash
A place where money is kept, or where it is deposited and paid out; a money box.
Cash
Any of several low-denomination coins of India, China, or Vietnam, especially the Chinese copper coin.
Cash
(transitive) To exchange (a check/cheque) for money in the form of notes/bills.
Cash
(poker slang) To obtain a payout from a tournament.
Cash
To disband. To do away with, kill
Cash
(slang) Great; excellent; cool.
Cash
A place where money is kept, or where it is deposited and paid out; a money box.
This bank is properly a general cash, where every man lodges his money.
£20,000 are known to be in her cash.
Cash
Ready money; especially, coin or specie; but also applied to bank notes, drafts, bonds, or any paper easily convertible into money
Cash
To pay, or to receive, cash for; to exchange for money; as, cash a note or an order.
Cash
To disband.
Cash
A Chinese coin.
Cash
Money in the form of bills or coins
Cash
Prompt payment for goods or services in currency or by check
Cash
Exchange for cash;
I cashed the check as soon as it arrived in the mail
Cash
Physical money in the form of coins and banknotes.
She paid for her groceries with cash.
Cash
Legal tender or currency that can be used to exchange goods, debt, or services.
He always carries cash for small purchases.
Cash
The money a business has after its liabilities are subtracted from its assets.
The startup is looking to increase its cash flow.
FAQs
Can a cheque bounce due to insufficient funds?
Yes, a cheque can bounce if there are insufficient funds in the drawer's account.
Is cash an immediate form of payment?
Yes, cash is an immediate and universally accepted form of payment.
Is carrying large amounts of cash risky?
Yes, carrying large amounts of cash can be risky due to loss or theft.
Do cheques leave a paper trail?
Yes, cheques leave a detailed paper trail, aiding in financial record-keeping.
Can a cheque be made to a specific payee?
Yes, cheques can be made payable to a specific person or entity.
Is cash suitable for anonymity?
Yes, cash is suitable for those seeking anonymity in transactions.
Can cash transactions be traced easily?
No, cash transactions are harder to trace compared to cheques.
Does cash facilitate quick transactions?
Yes, cash facilitates quick, immediate transactions.
Can cheques be written for any amount?
Yes, cheques can be written for any amount, provided there are sufficient funds.
Can cheques be used universally like cash?
No, cheques are not universally accepted, especially in retail contexts.
Is cash considered physical currency?
Yes, cash is physical currency in the form of coins and banknotes.
Are cheques a safer option for paying large amounts?
Yes, cheques are a safer option for paying large amounts.
Do cheques require a waiting period to clear?
Yes, cheques typically require a waiting period to clear.
Is cash accepted universally?
Yes, cash is universally accepted for goods and services.
Can cash be used for record-keeping?
Cash can be used, but it does not automatically provide a transaction trail like cheques.
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Harlon MossHarlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
