Cheque vs Promissory Note
Cheque vs Promissory Note

Before we discuss difference between Cheque and Promissory Note – Read here what is cheque and promissory note and its types. Cheque and Promissory Note both are a type of Negotiable Instruments used for making payment in day to day trading of goods and services in businesses. It becomes risky and inconvenient to make and receive payments through cash in large amount business transactions. So, Negotiable Instruments like promissory note and cheque are preferably used over cash to make payments. Negotiable Instrument is a document guaranteeing the payment of specified amount of money on demand or on at an agreed future date. In our recent article, we read about Promissory note and their types. Here you will read about differences between Cheque and Promissory Note.

Difference between Cheque and Promissory Note 


Cheque is a negotiable instrument in writing drawn on a specified bank directing him to pay certain sum of money to or to the order of certain person or the bearer of instrument. It is considered to be safest mode of money transfer or payment. There may be different type of cheques – Bearer Cheque, Order Cheque, Crossed, uncrossed, Anti Dated Cheque, Post Dated Cheque, Stale Cheque etc.

There are three parties to a cheque – Drawer (Account holder who issue the cheque), Drawee (Bank with whom the account is maintained), Payee (whose name is mentioned in the cheque or to whom the amount is payable)

Features of Cheque

  • Cheque should be writing and signed by the drawer.
  • It contains an unconditional order.
  • It can be paid to bearer on demand.
  • The amount should be specified and should be clearly mentioned both in figures and words.
  • It is drawn on a specified bank.
  • Unlike Bill of Exchange, it does not require acceptance

Promissory Note

Promissory Note or PN is an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money to the payee or bearer of the instrument at a specified future date or on demand. In other words, it is a written promise to pay a debt.


  • An unconditional undertaking to pay
  • Must be in writing
  • Amount to be paid should be specified or certain
  • Promissory Note must be payable to or order of a certain person or to bearer
  • Must be signed by the maker
  • Must be stamped as per Indian Stamp Act

Differences – Promissory Note vs Cheque

Here you can read the differences between a Cheque and Promissory Note.

  • A Promissory Note is an unconditional promise to make payment either in installment or in one go at a future date or on demand. While cheque in an order to make payment in one time.
  • Promissory note can never be conditional while cheque can be conditional.
  • There are two parties to a Promissory note – Maker and Payee. In Case of Cheque, three parties – Drawer, Drawee and Payee.
  • Cheque is drawn on a bank while Promissory Note can be made by any individual in favour of his creditor.
  • Cheque can be drawn in favour of self mean drawee can be payee but promissory note is always drawn in favour of another person.
  • Acceptance is not necessary in case of promissory note but in case of cheque, acceptance is required of the payee before it written.


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