If you have a checking account, you've probably heard of checks. So what is it?
A check is an essential document that businesses, individuals, and governments use to make financial transactions. This document includes the payee's name and the amount of cash, allowing banks to pay a certain amount of money. The person who writes the check is called the payor or drawer, while the person or organization that receives the check is the payee. Let's take a close look at what the check is, when it first appeared and how to write one.
History of Checks: Overview
There are debates around the appearance of the first checks. According to most experts, the invention of checks goes back to the ancient Romans. However, checks like today’s checks may be dated back to the 9-th century. With the expansion of international trade, travel in person over numerous weeks or months, they were frequently burdened with bags of money to carry with them. To make the rate easy, the merchants invented the check (a piece of paper with instructions to the merchant’s bank to pay). The invention of checks made trading easier for the merchants and was very secure from theft.
In the 15th century, checks were used in Europe. Finally, in the 17th century, the first printed checks were introduced in the United States.
By the mid-nineteenth century, the usage of checks had developed fast in the United States and had become a significant means of transaction. The number of people using checks was increasing rapidly.
The Key Components of Writing a Check
As the check is an order that instructs the banks to pay a certain amount to the receiver, it should contain:
- Recipient's name
- Word form of the amount sent
- Numerical amount
The date is another significant factor while writing a check, as it determines whether or not your check is postdated. Thus, by writing the date (month/day/year), you will inform the bank when it is written.
The recipient's name should be written on the first line of the check. Whether the check is for an individual or a business, provide their full name.
To avoid someone else typing in a new amount, the amount you want to send should be indicated in number and word formats. Also, check that these two forms are identical since even a penny discrepancy may prevent the payee from cashing the check.
The memo is optional. You can write there or leave the space blank.
The signature is a required attribute while writing a check; otherwise, the payee will be unable to cash it. Thus, before you hand over or mail the check, double-check that you have written down your signature.
Things to Consider While Writing a Check
Though writing a check is simple and does not require special skills, let’s not forget that we live in the era where con artists won’t miss the chance to take avail of your unawareness. Here is what you need to know before writing a check:
1. Write with a pen
The check should always be written with a pen. If you use a pencil, it will be easier for scammers to change the amount of your check and the payee’s name.
2. Don’t sign a blank check
The payor should be very careful not to sign a blank check before the payee's name and the amount are written. If you are unsure about the amount or the payee's name, you should not give someone unrestricted access to your checking account.
3. Keep your signature consistent
It is not a good idea to change your signature frequently as consistency helps your bank and you identify the fraud. In addition, it is much easier for you to state you are not responsible for the charges, as the signatures differ. Thus, make sure to put the same signature on every document.
4. Enter the correct information
When writing checks, make sure to input all the information accurately and without any mistakes. Pay special attention to the amounts, and don’t leave spaces between the numbers.
5. Don’t write a check payable to cash
Making a check payable to cash is like carrying a signed blank check or cash with you. If you need money, you may use your debit card or withdraw funds from the nearest ATM.
6. Keep the copies of your checks
Keeping the carbon copies of your checks will help you track your finances. You will know what you wrote on each check.
FAQs About Writing Checks
Can I Write a Check to Myself?
Writing a check to yourself is the same as writing it to someone else. First, you write your name in the “pay to the order of” area, specify the amount, and sign. Then, you can obtain it by going to your bank, through your mobile banking app, or in an ATM. Nevertheless, mind that you can’t write an infinite number of checks. Because each bank has its policy, the number of checks offered varies. It is determined by your income and other considerations like how long you have had an account with that bank, your work status, and other factors.
Can I Sign a Blank Check?
Payors should never sign checks unless the payee's name and the amount are written. Blank checks are a favorite technique of con artists.
The Bottom Line
We should all know how to write checks to manage our checking accounts effectively. However simple it may seem to write checks, there is a need for some basic understanding to prevent being a victim of fraud. Ensure that all of the information is entered accurately and that you proceed from top to bottom. Different sorts of checks are utilized in our financial system, each with its own set of procedures that must be followed while writing a check. Checks are growing in popularity because of the ease of cashing and you can always find check cashing places near you.