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Although it is not one of the most common payment methods today, the check is still used to carry out transactions of higher amounts, as is the case of paying the initial down payment on a house, for example. Because it is still a way to deal with large amounts, we teach you how to write a check.
What is a check?
A check is a payment system that allows a specific amount to be transferred from a holder’s account to a beneficiary at any financial institution. This gives the beneficiary the possibility of receiving the amount indicated on the check. Depending on the type of check, it can be deposited or picked up at a counter.
Types of checks
For a better understanding of this means of payment, it is important to list and explain each of the types of checks available to the Portuguese, so that you know exactly how to write a check.
This type of check has the full name of the payee, so it is clear who the recipient of the amount presented is. To withdraw this amount, the financial institution will require the beneficiary to present an identification document, so the name indicated on the nominative check must be exactly the same as that on the Citizen Card/Identity Card.
Contrary to the previous check, this check does not indicate the name of the beneficiary, with all fields except the name being filled in. This way, after having the check written out, anyone can withdraw it, which makes this payment method less secure.
Issued by the financial institution and not by the account holder, this payment method is intended for a third party – thus also being a personal check – and is always covered by the bank.
Since the amount of this type of check is guaranteed by the bank, it becomes safer for the recipient. If you settle the down payment on a house with a check, you will most likely be asked for this type of check.
However, please note that this type of check has a higher cost than a module/checkbook.
These checks are issued with future dates, and it is only possible to deposit or withdraw on those same days. In this way, the holder can pay a certain amount in installments or delay payment until the desired date.
This type of check is crossed by the holder in the upper left corner, diagonally, with two parallel lines, distinguishing itself from the others by the fact that the amount in question is held captive by the bank in the issuer’s account, for at least eight days.
To this end, the crossed check is subject to a visa and the bank puts a stamp on it, thus ensuring that the issuer’s account has sufficient balance for the payment. For this reason, this type of check offers greater security to the beneficiary.
Within the crossed check category, there are two types: general crossing and special crossing.
In the case of general crossing checks there is no indication within the lines, which means that these checks can only be deposited and not withdrawn. Furthermore, they can be deposited at any bank.
In turn, with regard to special crossing checks (on which the name of a bank must be written within the lines), these can only be deposited at the financial institution that is registered on the check itself.
But take note:
In any of the types of crossed checks, if the payee of the check is from the same financial institution as the issuer, then, in that case, you can choose to cash the check over the counter.
The two main differences between a crossed check and a bank check are their value – the acquisition cost of a crossed check is much higher than that of a bank check – and the requirement that the bank check bear the name of the beneficiary (something that is not is mandatory in the crossed check).
Unlike a crossed check, this one does not include the two lines inscribed on the check, and can be withdrawn at a counter at any financial institution, and it is not mandatory that it be deposited.
How to write a check?
In order to write a check correctly, you must know all its features, because knowing exactly what to write, where and what precautions to take, you will more easily be able to issue a check correctly and prevent it from being returned.
For a better understanding of how to fill out a check and its characteristics, see the illustrative example of a check filled out:
1. Check amount
Entering the amount in figures – including cents, even if they are zeros – is mandatory to issue a check correctly, and you must do so in the boxes indicated, one number per box and without exceeding them.
Then, you must cross out the unused squares with a continuous horizontal line (this way you avoid entering a value higher than what was filled in).
Although writing the amount in words is not mandatory, it is strongly recommended to do so to avoid fraud in the amount placed in figures – this because, in case of inconsistency, the value expressed in words prevails over the figures.
It should also make reference to the currency used (euros or dollars, for example) and cross out the unused space with a continuous horizontal line.
Value in figures: $234.67.
Value in words: Two hundred and Thirty Four Dollar and Sixty Seven Cents.
2. Place of issue
Indicating the place where the check was issued is not mandatory, but it is recommended. Immediately below the field for filling in the value in numbers, the consumer can write the place of issue. Think that the more complete the check filling is, the more secure it will be.
3. Issue date
The date of issue is mandatory and there is a field for this purpose, below the place of issue. Enter the date in numbers, in the boxes indicated for this purpose, placing one number per box and without exceeding them.
It is also important to look at the expiration date of the check, as the issue date must be before this.
To pay the check, the beneficiary must present the completed check to the financial institution within eight working days, counting from the date it is issued. If you exceed this period, depositing the check will be more difficult: the bank may refuse and the check issuer may ask the bank to cancel the payment.
To know how to write a check securely, you must understand the importance of writing down the payee. If you issue a check without an addressee, anyone can deposit it without hindrance. Thus, although not mandatory, it is strongly recommended to include the name of the person or entity to which the check is intended.
If you want the check to be paid solely and exclusively to the indicated beneficiary, then the check completed must be “not to order”. In this way, it is not possible for the recipient to endorse the check, that is, to transmit it to someone else’s name.
If your check is “on order” – a designation that appears before the space to put the name of the beneficiary -, simply erase that term and write “not on order” next to the name or in the space above the crossed out expression.
If you are the beneficiary, it is also important to know how to write a check to endorse it. To do so, on the back of the check, under “Account Number to be Debited”, you must sign and indicate the person or entity in favor of whom you are transmitting the check.
Finally, in order to reduce the probability of having your check returned, you must sign your identification document.
To ensure that the check issuer was the account holder, banks compare the signature with the one on the documentation provided when opening the account (and which must match the identification document).
How to write a check so that it does not bounce?
A check can be bounced for five different reasons, namely:
- Lack or insufficient provision of the account, that is, when the issuer does not have enough balance to ensure the payment (in this case, it is normally said that the check is not covered);
- Lack of a main requirement, such as the indication of the amount, the signature of the issuer, among others;
- Irregular endorsement (when there is an error in the check endorsement by the beneficiary);
- Revocation by the issuer;
- Out-of-date submission.
If the value of the check is equal to or less than 150 euros and if there is not enough balance for the payment, the financial institution is obliged to proceed with the payment. After this situation of irregularity due to lack of funds, the bank will send a registered letter to the issuer of the check asking him to pay the missing amount within 30 days.
If the situation is not corrected, the customer is prevented from transferring funds from his account through this means of payment, and he will also have to deliver all unused checks to the financial institution. Finally, your name, as well as the name of the co-holders of the account (if any), are included in the “List of Check Users Who Offer Risk”.
So that you don’t have a returned check, you should always find out if you have enough funds in your account to be able to use this payment method. On the other hand, do not forget to always consider all blank spaces on the check, ensuring greater security through proper filling.