How to read a #Canadian #Cheque – A Small Business Hack

I have never looked up how to read a cheque until I started my own business. Seems like I need this information all the time so I thought I would share this helpful hack!

Why you might need to read a cheque

  • Setting up a PayPal, Square or Stripe account
  • Setting up online shopping cart merchant
  • Setting up a freelance writing account

Where to find your Canadian cheque account number

When I first started working here at Cheque Print, I knew very little about what cheques were. I knew they acted in place of cash and I knew they were paper… that’s about it! As I trained for this job, I learned a lot. For example, there are specific guidelines for what can be printed on a cheque and where those items must be placed. Another key thing is that cheques are printed on secure stock, not just any old sheet of paper you have laying around! I also learned about the funny little characters at the bottom of every Canadian cheque. Those characters provide all the information your bank needs to process your cheque when it is deposited.

Read more about the specific requirements for a laser cheque here.

MICR Encoding

The black characters at the bottom of every cheque are known as the MICR encoding line. MICR stands for “Magnetic Image Character Recognition”. MICR encoding has lots of valuable information including the cheque number, your branch’s transit number, the institution code and your personal account number. These characters are printed using a special magnetic ink. Take a look at the cheque below. This is a dummy cheque with sample information, but it will help illustrate what I’m talking about.


Cheque Number: This section of characters corresponds to the cheque number found on the top right corner of your cheque. It may be only two or three digits or as many as six digits. For the most part, it is up to your  preference but many Canadian banks are beginning to require six digit cheque numbers in the MICR line.

Transit Number: This number is always five digits on Canadian cheques. It indicates which branch you opened your account at (often called your home branch). Even if you move cities and the branch you bank at changes, this number will always stay the same as long as you use the same Canadian cheque account number.

Institution Code: This number is always three digits. These three digits indicate what bank you use. All locations of the same bank will have the same three digit institution code. (For example Bank of Montreal is 001, TD Bank is 004, Scotiabank is 002, Royal Bank of Canada is 003, etc.)

Account number: This section can be anywhere from seven to twelve digits long, it all depends on your bank! These digits might be one long string of numbers or they may be split up by dashes. No matter what the configuration, this is your account number. It’s that easy!


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