What is Check?
A check is a document of a bank nature that has, specified, a written order of payment, by which the holder of a bank account, also called a drawer, enables another person, known as a beneficiary, to collect a certain amount of money in the bank, or drawer, where the former has its funds. The word comes from the English check or check, which derives from the verb “ to check ”, and which means ‘to verify’.
The primary function of the check is to serve as a means of payment, since, as such, under commercial law, the check is a title of value that gives its holder the literal, autonomous and legitimate right that said document reflects.
Check and its characteristics
The characteristics of a check to trust its validity must be, in general, the following: contain an explicit mention of the type of document that is (in this case, a check), name and address of the bank, date and place of issue, payment order for a specified amount of money, name and signature of the drawer or account holder’s own or autograph hand, and full name of the beneficiary. Some banks, in addition, to avoid fraud and counterfeiting, assign a number to their checks as internal control.
Types of Check
There are different types of checks, including:
- Bearer check: one that is paid directly to the person who carries it, without any other requirement.
- Nominal check: unlike the bearer check, the name of the person authorized to collect it is specified in the nominal check.
- Blank check: one that is delivered to the beneficiary without specifying the amount of money to be cashed.
- Cross check: one that has two parallel diagonal lines written on the front, indicating that the amount of money specified in the check must be deposited into a bank account or, failing that, cashed by another credit institution, but not paid in cash.
- Traveler’s or traveler’s check: one issued by a bank in the name of a person and that is payable by another establishment of the same institution or by another bank, either within the same country or abroad.
- Cashier’s check: the cashier’s check, also known as a cashier’s check, is one issued by a banking institution in the name of a person or beneficiary, since it is the bank itself that, in this case, acts as a drawer.
- Certified or conformed check: one where the banking institution itself endorses the existence of sufficient funds to pay the amount of money specified in the check.