Definition of 'Check'
Checks are a convenient way to pay for goods and services. They are also a safe way to send money, because they can be canceled if they are lost or stolen. However, checks can also be time-consuming to write and process.
There are two main types of checks: personal checks and business checks. Personal checks are used for personal expenses, such as paying bills or buying groceries. Business checks are used for business expenses, such as paying employees or vendors.
Personal checks are usually written on blank checks that can be purchased at a bank or credit union. Business checks are usually preprinted with the company's name and address.
To write a check, the drawer must fill out the following information:
* The payee's name
* The amount of money to be paid
* The date the check is written
* The drawer's signature
The drawer can also include a memo line on the check to indicate what the payment is for.
Once the check is written, it can be deposited into the payee's bank account. The payee's bank will then collect the money from the drawer's bank account and credit it to the payee's account.
Checks can take a few days to clear, so it is important to allow enough time for the payment to be processed. If a check is not honored by the bank, it is called a "bounced check." A bounced check can have negative consequences for the drawer, such as being charged a fee by the bank or being reported to the credit bureaus.
Checks are still a popular way to pay for goods and services, but they are gradually being replaced by electronic payments, such as credit cards and debit cards.
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