Carrying large amounts of cash is very risky, especially when one is travelling. Travellers' cheques are a secure and convenient alternative to carrying cash. These are pre-paid instruments available in fixed denominations. The holder of the Travellers' cheque is required to sign the instrument upon purchase and again, in the presence of the merchant establishment, at the time of making payment or the realising proceeds thereof. Travellers cheques can be replaced if they are lost or stolen, at no additional cost.
Travellers cheques are available in both domestic and international currency.
These instruments can be readily exchanged at bank branches anywhere and in several merchant establishments. The T.C. rate is less than the T.T. rate because the banks can use the funds until the full limit is exhausted by the consumer which is not the case in a telegraphic transfer. The interbank rates are finer than the TC rates and is based on the TT rates used for all inward and outward remittances. The currency rate is the rate at which the authorised dealer buys and sells the currency notes to its customers. It depends on the TC rate and is more than the TC rate for the person who is buying them.