types of checks

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The check is a very common tool in the financial world for which to issue payments, or deal with collections of a certain amount. There are many check options and in Many times doubts are generated about its use. That is why in this post we will explain the different types of checks that exist.

types of checks

bearer check

A check is a document issued to a person so that they can withdraw an indicated amount of funds, that the person who extends it has in a bank. In the case of a bearer check, It is the one in which the beneficiary is the person to whom the document is delivered. It can be collected by any person who has the check in their possession and is presented at the bank. 

Usually These types of checks are used to pay small amounts of money.. It is also usually used when the issuer does not know for sure who will be the person who will go to the bank to make the payment. 

intervene three actors in this type of operation:

  • the drawer: that person who issues and signs the bearer check. That is, the person who pays the money. 
  • The delivered: the bank that makes the payment of the established amount 
  • The holder or beneficiary: the person who owns the check and will receive the set amount

Bank check

In this case, the bank check refers to the document issued by a bank for the collection of a certain sum of money. The difference with the bearer check is that in this case the drawer and the drawee is the bank. 

We can find different types of bank checks: 

  • Bank check paid into account: This type of check can only be cashed by paying the money directly into a checking account. Cash will never be available. 
  • crossed bank check: If the check contains two crossed lines in the document, it means that it can only be charged by crediting the account. The lines state that if the check is stolen or lost, someone else can cash it since they are not authorized to do so. 
  • conformed bank check: In this case, the bank assures the beneficiary that the person writing the check has sufficient funds to meet the payment. 
  • Personal bank check: It is issued to a single natural or legal person who will be the only one authorized to collect the specified amount.  

post dated check

The postdated check is that document that is issued with a specific date. The issue date is always later than the actual date it was issued. 

This type of check is widely used for cases in which short-term loans or credit purchases are made. They are also used when the drawer does not have sufficient funds at that time to meet the payment and asks the beneficiary to collect it on a specific date when sufficient funds are already available. 

crossed checks

As we have already mentioned above, the crossed check is one that has two crossed lines in the document and that prevents the check from being cashed by another person in case of theft or loss. 

In this case, we can find two types of crossed checks

  • general cross check: In this case, it is when the word “bank” or “company” appears between the crossed lines of the check. This means that the drawee can only pay the amount to the bank or the bank's customer. 
  • special crossed check: In this case, the special crossed check occurs when the name of a specific bank appears between the two lines. That is, the amount can only be paid by the entity that appears in the document or to a client of the same. 

Conclusion

In the financial world there are always a multitude of options to receive payments, credits, aid, etc. In this case, heChecks are a very common tool to deal with collections, and it is very important to know how they work so as not to make mistakes. 

In the event that you need information on dealing with payments, or you need to acquire financing of some kind, At Alter Finance we can help you get iteither. Contact us without obligation and one of our financing specialists will answer your questions and advise you on which is the best way for you. 

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