What does 'A/C Payee' indicate on a cheque?

When a cheque is marked 'A/C Payee', it indicates that the cheque should only be deposited into the bank account of the individual or entity specified as the payee. This restriction is in place to enhance security and minimize the risk of unauthorized cashing or transferring of the cheque. In essence, it ensures that only the named payee can benefit from the funds, safeguarding against potential misuse of the cheque by other parties.

This feature is particularly important in business transactions where ensuring that funds reach the intended recipient is critical. An 'A/C Payee' designation does not render the cheque void or classify it as a bank draft, nor does it allow for easy transfer to another party. Instead, its primary function is to direct the funds explicitly to the specified account, adding a level of protection and accountability.