Concept in Definition ABC

A check is called a title of credit by which a person pays against a institution credit the payment of a certain amount of money to a third party. In other words, By means of a check, a person can authorize another to withdraw money from an account without the presence of the account holder..

In order to issue a check it is necessary to have a checking account in a Bank. Through this account, the bank receives money from a depositor and is obliged to return it by paying the checks made by the drawer. It is important to specify that it is not necessary for the drawer to be the account holder.

A check must meet a series of requirements: it must mention its quality as a check in the text of document, must indicate the place and date it is issued, must indicate the place of payment, must have the signature of the drawer, must have the order to pay a certain sum of money and must indicate the name of the credit institution where the account.

There are different types of checks

: the crossed, which can only be deposited and collected by another credit institution; the bearer check, which does not need to be endorsed to transfer; the check to order, which is endorsable; the check "not to order" that it can only be charged by the person in whose name it is issued; the certified check, which implies a bank entry stating that there is enough money in the account to cover the amount; the cashier's check, which is the one issued by a bank to its dependencies; the counter check, which are issued by an institution financial For your customers; and finally, the traveler's check, which is issued by a specific credit institution and paid by a dependence yours within the country or abroad.

The driving of commercial relations requires knowledge of the various documents used in these, as well as their possibilities. Hence the importance of knowing the advantages and disadvantages that the use of each type of check offers.

Check Issues