Check
Candlefocus EditorA check is usually filled out in two stages. First, the check payor fills out the front of the check by writing the date, the name of the payee, and the amount of the check. The payor then signs the back of the check, authorizing the payment. The payee then deposits or cashes the check at a bank, which transfers the funds from the payor’s account to the payee’s account.
Once the check is written, it may be transferred from person to person. To transfer a check, the prior holder of the check must endorse the back of the check. This includes the prior holder's signature and often includes other text along the lines of “Pay to the order of [Name]” or “For deposit only.”
Some checks, called certified checks, have an added level of security. A certified check fees a fee in exchange for the bank vouching for its authenticity. The bank verifies that the payor has enough money in their account to cover the check and then holds the funds. Once it is certified, the payee may rest assured that the check is authentic and that the bank will pay the amount of the check.
Cashier’s checks are similar to certified checks, except the check is already written out from the bank rather than from the payor. The bank typically charges a fee for this service.
Paychecks, or payroll checks, are commonly issued by employers to employees. The payor will usually fill out just the date, the name of the payee, and the amount; either the payor or a third-party will then sign the back and cash or deposit the check. Paychecks are made out from the employer’s account and are often issued as direct deposits, wherein the funds are transferred directly to the payee’s account without the payee ever having to cash the check at the bank.
Checks have long been a reliable form of payment. They provide a secure way to transfer funds, and both the payee and payor have certain protections. Additionally, checks are often faster than wire transfers, provide physical records, and come with the additional security feature of signing the check. As technology changes, checks are adapting with digital and mobile capabilities, while still providing a secure form of payment between individuals and businesses.