The Facts on How to Cash a Check
There are many ways you can pay someone or send someone money nowadays. One of the most popular methods is cashing a check. Unfortunately, not everyone knows how to cash a check, despite it being a common way of sending money.
However, there’s no need to worry, because we have created this article to give you all the facts on checks, how to cash one, and more. Keep on reading to learn how to cash a check and more.
What’s a Check?
Basically, a check is a bill of exchange or some form of document that always involves money. A check has to be written, dated, and signed. The one who makes a check is the drawer who is the one paying, so they are also called payors.
The one who receives the check is the payee. The money gets taken out of a checking account, so the drawer should have a bank account that can be a checking account.
The check is written to give the payor a certain amount of cash and a bank will be the one who receives the check to take out the cash, therefore the bank can be referred to as the drawee. The idea of a check is that two or more people can exchange money without actually handling any actual currency.
The sum of money in the check will serve a substitute for the same amount of the actual currency that should be given. However, keep in mind that this means real money from the checking amount will get transferred. This is just how money can be taken out and placed into a different bank account or physically given.
The drawer can get penalties if they create a check that has a larger sum of money than what’s in their actual bank account. In this case, the check will bounce so it won’t be processed.
Therefore, a penalty will be charged so the drawer will have to pay a fee. More commonly nowadays, people use online banking or wire transfers, but checks are still commonly used.
The Elements of a Check
Not every check will have all of the same parts, but something to take into account is the basic components that most checks have. Typically, the drawer’s name and contact information will be placed on the check.
Additionally, the drawer’s bank where their account is will also be placed there and the name of the one who is writing the check will be placed on the check. The payee’s name will be placed in the middle and how much money should be sent.
If the check isn’t signed by the drawer, it won’t be valid so it has to be signed.
Kinds of Check
As we mentioned earlier, not all checks are the same. That is because there are different kinds of checks to serve different kinds of purposes. A common and preferred form of check is a certified check.
A certified check means that the drawer has enough money in their bank account, therefore the check will not bounce. This will ensure that you won’t have to worry about a check not getting processed and wondering where your money is.
Another form of check is the cashier’s check. This is a guaranteed check that is signed by the bank’s cashier, therefore the bank itself guaranteed it. Typically, this kind of check is used for bigger amounts of money, such as buying a car.
People also use this for the payrolls to pay their employees. However it is more common now for employers to make a direct deposit to their employees through digital banking.
How to Cash a Check
There are usually three ways that you can cash a check, but you should check with the bank first before you do so. However, we will talk about the most common way to do so because most banks accept this method of cashing a check.
First you should bring a valid photo ID to your bank. If you already have a bank account with any bank, they’ll be the ones to cash the check in for you. But what if you don’t have a bank account?
Well, you should try to visit the bank where it was issued. Go to a local bank that is the same kind of bank as the issued check, because of most of them will be willing to cash checks in if they came from their bank.
This is a good way to get your cash in real life without having to ask to borrow someone’s bank account or wonder how you can get the cash. However keep in mind that you might be required to pay a fee for this.
If you can’t go to the bank itself, you can endorse the check to somebody that you really trust. You should only ask a family member or close friend to avoid losing your money. This way you won’t have to pay a fee for getting the cash without a bank account.
Just ask the person if they have a checking account, and all you have to do is to write your name and then put their name after “pay to the order of.”
Checks don’t have to be confusing. Once you have read all of the basic facts of what a check is, how to cash a check, and what kind of checks there are, you should have no problem when it comes to writing or cashing out a check.