An official check is a written authorization for a bank to take money from the payee's account and deposit it into the beneficiary's account. Although they aren't as common as they once were, checks are nevertheless widely used and accepted across the nation.
- The date is located in the top right corner of the page. The date is frequently used while writing checks. After six months, a check is no longer valid and cannot be cashed. Even better, you may "post-date" a check by adding a future date. Before that time, the check cannot be cashed.
- Identify the recipient of the check by writing their name. This could be a person, a business, or an institution. This section must be filled out completely in order to prevent someone else from cashing the cheque. Put the beneficiary's name on the line that says, "Pay to the order of."
- The amount on the check should be written down. There are two ways to do this. Start by entering the number in the box beneath the date. Then, write the cheque's dollar amount in words on the line beneath the beneficiary's name, such as "one hundred" or "fifty-three." You can use integers bigger than 100 to represent the cents, like "27/100." Draw a horizontal line before or after the numbers in the box and on the line to fill in any empty space, preventing anyone from adding more numbers to increase the sum.
- Under "memo," indicate what the check is for. Although it's not required, this message can be useful if there's a disagreement about what you're paying for.
- On the line in the bottom right corner, sign the check.
Always use blue or black ink to write checks. Because someone might erase what you wrote and replace it with their own name and amount, write using a pen rather than a pencil.
Utilizing checks
Use the preceding steps to fill out a check if you're paying with one. then give it to them or send it to them by mail.
The beneficiary's bank account will receive the check for deposit. In person at their bank, at an ATM, or by utilizing a smartphone banking app are all options for them to complete this. At this point, the check must be cleared; the bank must confirm that it is legitimate and that you have enough money in your account to finish the payment. However, many banks will advance the money straight away so it can be placed into the beneficiary's account. The clearing process often takes a few days.
In such circumstances, the bank might put a hold on the cheque. If your bank is unsure if you have enough funds in your account to cover the payment, this could occur. Additionally, a hold stops the recipient from using money that isn't actually in their account. In Canada, a hold can be placed for a maximum of four business days.
If there isn't enough money in your account to cover the payment, the check will bounce. In this case, the funds will be deducted from the recipient's account, and you will be billed a non-sufficient funds fee. You must still make the payment, and depending on the recipient, you can incur a late fee.
If you need to stop the check from being deposited after you've submitted it, ask your bank for a stop payment. All the information on the check must be sent to the bank, and most banks will charge you a fee for this service. If your request is not fulfilled prior to the check being deposited, you will need to get in touch with the beneficiary to obtain a refund.
Options besides writing checks
Checks aren't used nearly as frequently as they once were because of technological improvements. Online payments, credit cards, direct deposits, and money transfers through internet banking are some of the other payment methods that are becoming more and more common. These methods require far less work from both parties and are significantly more effective than mailing a cheque. Additionally, the majority of these choices offer extra security in case of a problem and have a lower fraud risk.
Guidelines for preventing check fraud
Check fraud is unfortunately a possibility. The following advice can help you avoid being a victim of check fraud:
- Make sure you accurately and completely fill out your checks, leaving no blank areas.
- Keep your blank checks in a place that is both secure and safe.
- Keep an eye on the balances and statements for your bank accounts. Contact your bank right once if anything seems strange.
- Any remaining checks after closing a bank account should be destroyed.
In conclusion, I hope you have gotten the five steps that you must follow when writing a cheque to prevent frauds or any other mistakes. Thanks 🙏 for reading this article. Incase we have missed out anything feel free to add it in the comment section. We will be very grateful 🙏.
