Canilao, Haizlyne Jade R.

BSMA 4A
TYPES OF CHECKS
Check: A draft drawn by a depositor (the drawer) ordering a bank or other financial institution
(the drawee) to pay a sum certain of money on demand to, or to the order of, a third
person (the payee). The drawer is liable for ensuring that sufficient funds are in his
account to cover the check.
TYPES:
1. Cashiers Check: A check drawn by the bank on itself, rather than on a drawers account,
which constitutes the banks (1) promise to pay the payee on presentment and
(2) assumption of liability if the bank fails to pay.

2. Travelers Check: A check, often used as a substitute for cash, that is (1) drawn on or
payable through a bank and (2) payable on demand by the holder. A travelers check
does not require the holder to present it to the drawee bank for payment.

3. Certified Check: A check that has been accepted by the drawee bank prior to
presentment (indeed, often at the time it is issued). By certifying the check, the bank
assumes all liability for failure to pay the check on presentment.

4. Memorandum Check : A check given by a borrower to a lender, for the amount of a
short loan, with the understanding that it is not to be presented at the bank, but will be
redeemed by the maker himself when the loan falls due. This understanding is
evidenced by writing the word "Mem." on the check. This is not unusual among
merchants.
5. Managers Check: it is one drawn by the banks manager upon the bank itself. It is
similar to the cashiers check both as to effect and use.

6. Crossed-check: Any check that is crossed with two parallel lines, either across the whole
check or through the top left hand corner of the check. This symbol means that the
check can only be deposited directly into a bank account and cannot be immediately
cashed by a bank or any other credit institution.

7. Stale Check: A document that is a promise to pay money that is held for too long a
period of time before being presented for payment. A check is considered to be stale
when it is outstanding for a period of six months or more. A bank is not obligated to pay
a stale check.

8. Postdated Check: a check delivered now with a written date in the future, so that it
cannot be cashed until that date. The danger to the recipient is that such a check is
legally only a promissory note due at the later date, and if the account is closed or short
when the check is presented at the bank, the payee has no rights to demand payment
by the bank or claim that the delivery of a bad check was criminal.