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A check or cheque (borrowed from Persian چك Chek) is a document instructing a financial institution to pay a specific amount of a specific currency from a specific demand account held in the maker/depositor's name with that institution. Both the maker and payee may be natural persons or legal entities.
In the United States, the legal noun for a check varies with the type of financial institution on which it is drawn. In the case of a savings and loan it's a negotiable order of withdrawal; if a credit union it would be a share draft. Checks as such are associated with chartered commercial banks, but in common usage check is understood to mean any or all of these negotiable instruments. Parties to regular checks generally include a maker, the depositor writing a check; a drawee, the financial institution where the check can be presented for payment; and a payee, the entity to whom the maker issues the check. Ultimately there is also at least one endorsee which would typically be the financial institution servicing the payee's account, or in some circumstances may be a third party to whom the payee owes or wishes to give money.
A payee that accepts a check will typically deposit it in their account at their bank, and have the bank process the check. In some cases, the payee will take the check to a branch of the drawee bank, and cash the check there. If a check is refused at the drawee bank (or the drawee bank returns the check to the bank that it was deposited at) because there are insufficient funds for the check to clear, it is said that the check has bounced.
When a maker has their bank hold the funds for the amount of a check and guarantee funds will be available for the check to clear, it is referred to as a certified check .
A check used to pay wages due is referred to as a payroll check. Payroll checks issued by the military to soldiers, or by some other government entities to their employees, beneficiants, and creditors, are referred to as warrants.
When a check is designed to allow the person signing it to make an unconditional payment to someone else as a result of paying the account holder for that privilege, it is referred to as a travelers chequeA travelers cheque is a preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer (usually a bank) for that privilege. As travelers cheques can usually be. As travelers cheques can usually be replaced if lost or stolen, they are often used by people on vacation in place of cash. The use of credit cardA credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. A credit card is different from a debit card in that the credit card issuer loans the consumer money rathes has, however, rendered them less important than they previously were; there are few places that do not accept credit cards but do travelers cheques – in fact, nowadays, many places do not accept the latter.
A check sold by a post officetown hall in Lockhart, Alabama A post office is a facility (in most countries, a government one) where the public can purchase postage stamps for mailing correspondence or merchandise, and also drop off or pick up packages or other special-delivery items. or merchant such as a grocery for payment by a third party for a customer is referred to as a money orderA money order is a check issued by an organization such as the Postal Service or sold by third parties such as grocery stores, convenience stores, or banks and other financial services companies, to allow individuals to make payments to each other or to p, in the UK they are called Postal orderA postal order is a method for sending money through the postal system. They can be bought and redeemed at post offices, come in fixed denominations, and are legal tender in the UK. The fee for using this form of payment tends to be around 8%.s.
A check issued by a bank on its own account for a customer for payment to a third party is called a cashier's check or a treasurer's check . Banks often sell money orders, and travelers cheques are usually purchased from banks.
An order check – the most common form in the United StatesThe United States of America also referred to as the United States U. America ¹ or the States is a federal republic in central North America, stretching from the Atlantic in the east to the Pacific Ocean in the west. It shares land borders with Canada in – is payable only to the named payee or his or her endorsee , as it usually contains the language "Pay to the order of (name)." A bearer check is payable to anyone who is in possessionPossession is having some degree of control over something else. A person may be in possession of some property (although possession does not always imply ownership); a spirit may be in possession of a person. Like ownership, the possession of things is c of the document, although such checks are often crossed a/c payee to restrict payment to the payee.
External link: Information on cheques in the UK from APACS
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