- Checks are not the most common form of payment these days, but they can still be a useful form of payment in some situations.
- There are several fields that you will need to fill out when writing a check. Only one is optional.
- You can request checks from your bank or credit union, but you may be charged a fee.
- Visit Insider’s Investment Reference Library for more stories.
Credit cards, cash, and digital payments may be the norm today, but traditional bank checks still have their benefits.
As John Cabell, director of banking intelligence and payments for JD Power, explains, “The buyer has better management of when to withdraw cash from their account, the ability to safely direct the payment to the specific seller. and the ability to create a clear record of the transaction with all parties, including the bank. These advantages make checks particularly useful for transactions by courier, for purchases of a large amount, or for purchases where the buyer wishes to minimize the risk of fraud.
In many cases, checks can also be the preferred type of payment for a business or service provider. Are you considering using a check for an upcoming purchase? This guide will take you step by step through the process.
The anatomy of a check
Before writing a check, it is important to understand the unique fields a check contains, as well as those for which you will be responsible.
On the front of the check, you will find:
- The deadline : This is where you will enter the date you issue the check. Be sure to include the year.
- Beneficiary: This field begins with “Pay to the order of” and it is there that you will enter the name of the recipient of the check.
- Amount written: This is an empty box on the right side of the check. You will enter here the amount of the check in figures.
- Legal amount: This is a blank line followed by “dollars” and this is where you write the check amount in letters.
- Memo line: Located in the lower left corner of the check, it is a blank line preceded by “For”. This field is optional and is where you can write the subject line for your check.
- Signature line: Located at the bottom right of the check, this is where you will sign your name and approve payment.
Then there is the back of the check where you will find:
- The endorsement line: This is used by the recipient of the check when he deposits it in his bank account.
Step 1: Fill in the recipient’s name
On the payee’s “For” line, you should write the name of the person you are paying in clear, legible handwriting in black or blue ink. Make sure to use their correctly spelled legal name (so not a nickname), otherwise the recipient may have difficulty cashing or depositing the check. You can also put a business name on the payee line if you are buying from a company or service provider.
Step 2: Fill in the amount of the check
Then you will need to enter the payment amount. In the blank box to the right of the check, write the amount in numbers (for example, $ 150.99). On the longest line under the beneficiary’s name, write the amount in words (i.e. one hundred and fifty dollars and ninety-nine cents). Also make sure these two amounts match, otherwise the recipient won’t be able to deposit the check.
Step 3: Date the check
In the upper right corner of the check, you write today’s date, making sure to include a month, day, and year.
Some people may put a future date on their check, although this is generally not recommended. This is called the “post-dating” of a check, and it may cause the recipient to delay depositing the check until a certain date. This can be advantageous if you wait until you have enough funds in your account to cover the payment, but there is also a risk: according to the Office of the Comptroller of the Currency, banks are not required to wait until this date to process. the check. If the recipient deposits it earlier, you risk overloading your account.
Step 3: Sign the check
Finally, you will need to sign the check using the line at the bottom right. This shows that you, the account holder, have approved the check.
Step 4: Complete the memo (optional)
If you wish, you can also fill out the memo line and note what the check was used for (eg, “lawn services”.) This is not required, but you can do this to notify the recipient of what. serves the money – or just to keep track for yourself. For example, if you send a birthday check to a loved one out of the blue, you might add “21st birthday gift”.
The financial report
Checks might not be the standard form of payment these days, but there are still times when you need to use one to pay for services, make a purchase, or send money. Be sure to talk to your bank about getting a checkbook if you haven’t issued one already, or you may also be able to request checks on your online banking dashboard.
If you still need help writing a check, seek help from a local banker or financial advisor. You can also ask your bank for a cashier’s check, a type of bank check printed only for the recipient.