What is a Check?

A check is like a written promise…

When you make a promise, you typically tell them you’re going to give them something or do something for them. A check is like a written promise, telling the holder how much money you’re going to give them when they deposit or cash the check with their bank or credit union.

A check is a financial instrument that promises a set amount of money to the recipient. When someone writes a check, they typically sign it, date it, write the name of the person they’re giving it to, and specify the amount of money that they’d like to give them.

The check serves a written instruction for the writer’s bank to transfer money to the bearer (recipient) of the check.

Checks create a paper trail for the movement of funds. They’re also a more secure way to transfer money than carrying around and handing someone a large sum of cash.

Checks also have downsides. For example, someone could write a check for more money than they have in their checking account, leaving the bearer with a worthless piece of paper.

Paying someone with a check is relatively simple, just fill out all the fields on the check and hand it to the person you’re paying. Then the person receiving the check can generally deposit it at their bank or an ATM.

Once a bank receives a check, it typically goes through the following steps:

1. The receiving bank takes the deposited check and sends it (usually digitally) to an intermediary bank or clearinghouse.
2. The intermediary uses the routing number printed on the check to identify your bank and then sends the check, along with a request for payment, to your bank.
3. Your bank uses the account number to verify which account it should draw funds from, reviews the check, and confirms that the request for payment is valid.
4. Your bank then sends payment to the intermediary bank and deducts the check amount from your account.
5. The intermediary bank sends payment to the receiving bank.

Every bank has different policies, but it’s common for a bank to let its customers withdraw a small amount immediately, or almost immediately, after depositing a check. The rest typically remains on hold while the check is processed to help protect against bad checks.

There are also businesses that will let you cash your check immediately, but these companies often charge fees for their service, so you’re best off going to your bank whenever possible.

Checks may have been used as early as Ancient Rome, but the modern check has its origins in the 9th century.

Muslim traders involved in international commerce grew overburdened by the coins they had to carry on their journeys and invented the sakk. The sakk was a piece of paper instructing the bearer’s bank to contact the sakk writer’s bank to transfer funds.

Banks established a network for processing sakks and the modern check was born.

By the 16th century, checks became negotiable, which means that the person who originally received the check could sign the check over to a third party (someone other than the person whose name is written on it).

Checks made their way to North America during the colonial era, and printed checks like the ones we use today first appeared in the 1760s. They became the primary way of making payments in the United States by the middle of the 19th century.

Checks continued gaining popularity, and by 1979, 86% of all non-cash transactions occurred by check. Further advances made the process of settling checks faster and more efficient, encouraging ever-increasing use of checks until electronic payments supplanted them.

• Personal information: Your name, address, and the name of your business if applicable
• The Payee: The name of the person you’re paying
• The amount box: The amount you’re paying (in numbers)
• The amount line: The amount you’re paying (in words)
• Date: The date you write the check for
• Signature: Where you sign the check
• Bank information: The name and address of the bank
• Routing and account numbers: The routing number for the bank and your checking account number
• Check number: Each check from your account has a unique number to help identify it
• Memo: An optional field where you can add a note

There are several types of checks.

A cashier’s check is a type of check that offers guaranteed funds. You have to request a cashier’s check from your bank. When you do, the bank withdraws money from your account or places a hold on it immediately. The bank may charge for this service.

A personal check is the type of check you probably think about when you hear the word check. When you sign up for a checking account or money market account, you usually receive a checkbook with your account information on it.

Unlike cashier’s checks, personal checks are not guaranteed — Someone could write a check for more money than they have.

A payroll check is a check given to an employee to pay them for work performed. The check includes only the worker’s net pay after taxes, insurance, and other deductions.

Many companies use direct deposit, sending payroll checks directly to their employees’ bank accounts, but they can also issue paper checks for their workers to deposit or cash.

To write a check, follow this process:

1. Put a date on the check in the date field.
2. Write the name of the person or company that you want to pay.
3. Write the amount you are paying, in numbers, in the amount box.
4. Write out the amount you are paying, in words, on the line next to the amount box.
5. Optionally, add a memo in the memo field to note what the check is for.
6. Sign the check on the signature line and give it to the person or business you’re paying.

You can usually deposit checks in-person at a bank, at an ATM, or using your phone or computer. Each uses a similar process.

To start, sign the back of the check on the indicated line.

If depositing in-person or at an ATM, bring the check to the location, fill out any necessary forms (in paper or on the ATM), and hand the check over. If you’re making a mobile deposit, you’ll usually have to add a phrase like “for deposit only” beneath your signature. Then, open your bank’s app and take a photo of the front and back of the check. Enter the amount of the check and submit the deposit.

When making a digital deposit, make sure to keep the check for as long as your bank recommends. If there is an issue with the deposit, you’ll need to produce the paper copy to confirm the details with your bank. If you can’t, the bank may remove the amount from your account.

A check is cleared when the depositor's bank has received the funds from the check writer’s bank.

Depending on the amount of the check and the banks involved, it usually takes anywhere from two to five business days for a check to clear.

Banks typically place a hold or limit your ability to withdraw funds from a large check. However, just because the bank makes those funds available doesn’t mean the check cleared.

This is because federal laws regulate how quickly banks must let you access funds you deposit. You must be able to withdraw $200 the day after you deposit and $600 the second day after that.

The best way to keep yourself safe is to wait a few weeks before using the money or to avoid depositing suspicious checks whenever possible.

A bounced check is a check written against an account that doesn’t have enough money to cover the check. For example, if a check is written for $1,500 and there is only $1,000 in the account, then the check will “bounce” instead of clearing.

There are a few reasons that someone could bounce a check:

1. Fraud. They write a check promising to pay more than they have, to try to receive a good or service before it’s discovered that they can’t pay.
2. Mistake. They might not realize their account balance isn’t high enough to cover the check.
3. Expecting money that doesn’t come in. Some people may write checks for more than they have, planning (or hoping) to receive the difference before the check is deposited.

If you write a check that bounces, your bank will typically assess fees. If you have overdraft protection services for your account, the bank might decide to pay the receiving bank anyway, charging you an overdraft fee and putting your account balance in the negative.

The person who deposits the bounced check might also end up paying a fee.