Checks are financial documents used to order a specific banking institution to distribute a certain amount of money. Checks are extended by an issuer to another party (company, person, or governmental entity) which we call a bearer. Naturally, with various parties transferring all sorts of funds, there are several different types of checks, and here are some of them.
What are some of the most distinguished types of bank checks?
- Bearer check. These are used by the transaction initiator, the payer, and allow the payee (the bearer) to order the transaction at the bank, which results in the payer’s receiving funds from the institution. This money-moving procedure might, however, come to be fraudulent and risky, as a result of check loss and a non-endorsed party collecting the funds.
- Order checks. These checks were proven to be the safest, as nobody apart from the payee can receive the funds. This makes it the most recommended form of common checkbooks.
- Crossed checks are made with an option to deposit money directly into an account by ‘crossing’ it – adding two parallel lines, usually at the upper left corner. The crossing allows bankers to easily identify the collecting party.
- Uncrossed checks or open checks can be cashed at all banks. These allow bearers to obtain funds hand-to-hand, or transfer the funds on the check directly into the bearer’s account.
- Certified checks are personal checks written by certain bank account holders that have previously been drawn on the owner’s account and guaranteed by the account holder’s banking institution or union. These are especially important for larger transactions, as personal checks can turn out to be uncollectable.
- Anti-dated checks are generally valid up to a six-month period through the date of the check; the drawer can, for instance, set the check to bear the date of the 15th of July, when really it was issued on 10th of June.
- Post-dated checks mention a future date to the date of presenting the check; for example, if a check bears the date of the 15th of July, it can be cashed no earlier than the date set.
- Mutilated checks are checks that have been damaged and torn into several pieces. When these are presented to the banker and ordered for a payment, they will not be extended unless the bearer is confirmed by the payer.
- Teller’s check is written by banks or other banking institutions to order a transaction at another bank or institution. These are signed by tellers at the first institution. For instance, if the check is written against the Bank of America, that banking entity is obliged to extend the funds.
A few other checkbook types are in use, however, they are rather infrequent. Some of them are traveler’s checks (most commonly used by individuals spending vacations in foreign countries, who prefer to pay with checks rather than cash) or window checks (signed by the payee to imply the collection of the funds).
Overall, having a plethora of check types to choose from is a fantastic thing; even though the bearer checks are the most common check type, every individual is entitled to pick an option that is the most suitable for their money-moving situation. As a check-issuing service, we are experts in this area. Thus, we encourage you to get to know our business here.