All you need to know about checks

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With debit and credit cards widely in existence today, writing checks can seem like a tedious job. However, checks are not going extinct yet and there are billions of checks written throughout the year across the globe. Hence, whether you are used to writing checks or not, it is important to have an idea of how they work and how to use them. 

Checks are used for many purposes, and they are not easy to steal, which means your larger purchases remain secure. They are also easy to use if you want to send money to a different country without having to exchange foreign currency. Let’s take a look at the different types of checks available today.

Types of Checks 

  1. Bank Check: This is a traditional check given by the bank or credit union. 
  2. Electronic Check: An electronic check is a digital version of a check.
  3. Payroll Check: It is a check given to you in the form of payroll.
  4. Personal Check: It is a check from somebody’s bank account.
  5. Commercial Check: Whenever a customer pays a business with a check, it is known as a commercial check.
  6. Traveler’s Check: This is a prepaid check which can be used like cash when traveling. 
  7. Money Orders: This works like a prepaid check. 
  8. Government Check: This is a check written by the government and could be for aid and grants.
  9. Business Check: A business check is used by businesses and linked to the business bank account. 
  10. Insurance Check: An insurance check is paid by an insurance company when a qualifying event occurs.
  11. Tax Refund Check: A tax refund check is written by the Government to qualifying taxpayers.
  12. Out-of-State Check: An out-of-state check is when the writer’s bank account does not exist in the state where it is being deposited. 

Tips to write a check 

Let’s take a look at the right way to write a check.

Current date: The first thing you need to write on your check is the current date. It will go on the top right-hand corner of the check. 

Payee name: Now you need to look for the line that says, ‘Pay to the Order Of’ and fill in the name of the individual you are paying. This should be very accurate.

Amount: Now fill in the amount in numerals in the little box on the right side of the check. Start writing from the extreme left side of the box and do not leave any extra space at the end. For example, if you are paying $100, write $100.00. 

Write the amount: Write the amount in clear words. In case the numerals and the written amount do not match, the written amount will be considered. Hence, write the written amount clearly and in capitals. 

Signature: Place your signature on the bottom right of the check and ensure that it matches the one that the bank has on file. If the sign does not match, your check will be rejected. 

What not to do with a check

Alterations and modifications: If your check looks like it has been changed or customized, the check will be returned. This means you cannot use unique styles of handwriting, or different colored inks. There could be trouble even if there is a mistake, but you can cross out the error and write your initials on the modifications you make. However, there is no guarantee that the check will be accepted. 

Wrong signature: If you have multiple signatures you use, your check will not be accepted. The sign on the check should match the one on the bank file. 

Post-dating the check: An incorrect date will mean trouble. If you need to post-date the check, you need to ensure that the payee understands this. If the check has a future date or is dated too far back, it will be returned. 

Whether you write personal checks or business checks, these are a few common things you need to keep in mind if you want to ensure that it is not returned. 

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