Everything that we acquire for our basic needs today required giving money, which is accepted as a medium of exchange in a particular country or region. Since we can’t predict the future, we basically save money by keeping it in ourselves, by lending it to others or by putting it in a bank or other financial institution. If we possibly will, we would know precisely the amount of money we will need for the things in the future. But because we can’t do this, the need to save money for the prospect future and expenses daily is very important for an individual. Then, what was the best decision where to put our money? Definitely, put it in a bank or other financial institutions especially when it is in a big amount.
In view of the fact that your money is in the bank you wouldn’t able to bring it physically whenever you are. But because of innovations and continuous improvement, banks provide a lot of techniques or ways for the convenience of their customer and one of this is using Cheque.
In finance, Cheque are bill of exchange drawn on a bank and payable on demand. It is an order to a bank to pay a certain sum of money from a specific person’s account paying the other person, named written on the check with the word, an order to pay. The check is one of the negotiable instrument involved three parties first, drawer, person writing the check, has a banking account transaction on one financial institution frequently called current check where their money is in custody of the bank and being kept there. The drawer writes the various details including the specific amount of money and its currency, the payee’s name who is the person require to be paid, the date and signs it, the bank that has been ordered is well-known as the drawee, to pay that person or business the amount of money stated on the check. The Check is used to make safe and convenient payment. The loss is minimized by the use of it as well as it is less risky.
Different Types of Cheque
- Personal Check– It is acheck drawn against funds deposited in your personal checking account since it is an order from the one who has an account in a specified bank or financial institution.
- Bearer Check– From the word itself, “Bearer” it means that it is a check which is payable to any person who at hand it for payment at the bank and present it to the institution. A bearer of the check without requiring the proof of identity. This check can be transferred or transport through delivery and requires no endorsement.
- Certified Check– on bank integrity on information about the Cheque and in the holder’s account. Certified check is a kind of check where the bank guarantees the receiver of the check that there is sufficient cash available in the owner’s account to be moved or transferred to the payee. Also, when the check is used, it guarantee if the account of the owner or holder’s signature on the check is genuine or not a forged. Certified Cheque are typically when the recipient are not sure about the capacity of the holder. His worthiness and to be sure that the check wouldn’t be bounce.
- Cashier’s Check– This type of check is the official check, teller’s check. It is guaranteed by a bank, drawn on the bank’s own funds and signed by a cashier. If you have a big purchase to acquire and can’t use a debit or credit card, a cashier’s check can be a great method or technique to pay a big amount of money. Since the fund is same from the funds own account. You can purchase one of these Cheque from a bank or credit union, and all parties can be confident that the transaction is safe, secure and the risk of stealing or fraud is minimal.
- Travelers Check- It is simply came from the word itself the “Travelers Check” it is a type of check that is exchange for transport around cash while you are travelling out of the country or on a vacation break to a foreign country as they come with a substitute guarantee and can be valid for a long time period. It is a similar option as debit card. There are some advantages in using travelers check like it cannot be used when stolen. For the reason that the Cheque are signed at the time of purchase, and then must be countersigned when they are cash in with a vendor or bank. Replacing a lost or stolen traveler’s check is also easier than putting back most credit and debit cards when it is stolen to you.
- Money Order– Is a payment order for a certain amount of money it is readily converted into cash. As it is necessary that the certain money or funds must be prepaid for the amount shown on it, it is a more trusted and reliable method or way of payment than a check. It is almost similar to a certified check for it is purchased for the amount desired. A certificate that allows the confirmed payee to receive cash on-demand, usually issued by governments and banking institutions. Money orders purpose much likely a check, in that the one who purchased the money order can stop payment.
- Computer Cheque– Just like the convenience like computers, computer Cheque are an easy way to pay multiple bills at once. This kind of check has a high safekeeping laser Cheque go beyond all specifications and stipulations required by the American Bankers Association and are well-matched with well known and top-rated financial software programs.
- Three-to-a-Page Cheque– Is 3 Cheque which is printed in only one whole page. Just like a usual Cheque it is used as a payment instrument that is subject and issued by a depository bank account holder for making payments and expenditures to an individual, company or institutions and cash withdrawals from the bank. For instance, you can make cash payment for an electricity bill or you can do it by writing in a check.
- Wallet Cheque- This type of Cheque is similar to personal check and it has two distinctions, these are the standard Cheque you are most likely most familiar with. All personal Cheque or the single-wallet format. And the Duplicate check with a carbon copy beneath the original check. When you write a check and slash it out, there is a copy for your records underneath or below it. If you want to be able to carry company Cheque with you, it’s a good and brilliant idea to get or to have a set of business wallet Cheque.
- Government Check- This type of check is usually known as the state check it is a check issued to you by the federal government, such as an Incentives, Government benefits, Employment Insurance, Benefit for Child Tax and many more There is some banks that will cash government Cheque for not a client of the bank, but they do charge a fee, for you have no account with them. This check is usually isn’t inexpensive.
- Teller Check or bank draft- It is Similar to a certified check but the bank will set to the side the resources of money or your funds until the bank draft is used. This check is usually used in acquiring or dealings in a transaction between larger sums of certain money for your payment. It is drawn from one bank against funds deposited into its account at another bank, allowing the second bank to make payment to the individual named in the draft.
- Bank money orders and personal money order– Bank money orders is simply a money order that is purchased from a bank, to a certain extent than on a simple store such as grocery or post office, which are other site where money orders can be obtained, purchase or get. A bank money order is not the same thing as a cashier’s check, which is drawn on the bank’s own funds. As substitute to credit card. On the other hand, personal money order is a prepaid monetary document that is signed and given to a receiver by an individual. Money orders must issue a certain sum of money. The benefit of using money order is that the one who purchase it has control over the money and may place a stop payment on this check if it was stolen from you or suddenly losing it. In addition to, it can be acquire or pay for in different place such as banks, post office and other financial institutions.
Knowing the important and benefit of Cheque is necessary for an individual having a large amount of money in a bank. They can acquire Cheque for it is one of the safest modes of making payment and it can be traced back if necessary. It is portable and low risk. As well as when it loss it is effortless and uncomplicated to substitute rather than debit card, credit cards and other financial products money carrier.