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A cheque (or check in American English; see spelling differences) is a document that orders a bank, building society (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.
Cheque writers are advised to specify the amount of the cheque before signing it. A blank cheque can be extremely expensive for the drawer who writes the cheque, because whoever obtains the cheque could write in any amount of money, and might be able to cash it (if the current account or checking account contains sufficient funds, and depending on the laws in the specific country).
Cheque clearing (or check clearing in American English) or bank clearance is the process of moving cash (or its equivalent) from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.
The parts of the check you need to fill out to make it valid are the date, recipient's name, the dollar amount of the check, the dollar amount of check written out in words, the memo line and your ...
Write the check amount in words. Next, write out the dollar amount in words on the line below “Pay to the order of,” making sure it matches the numerical amount. Add the cent amount over 100.
If a cheque is dishonoured for any reason, the bank on which it is drawn must promptly return the cheque to the depositor's (payee's) bank, which will ultimately return it to the depositor. The depositor's bank will debit the amount of the cheque from the depositor's account into which it had been deposited, as well as a service fee.
MICR encoding, called the MICR line, is at the bottom of cheques and other vouchers and typically includes the document-type indicator, bank code, bank account number, cheque number, cheque amount (usually added after a cheque is presented for payment), and a control indicator. The format for the bank code and bank account number is country ...
That is in contrast with a personal check, for which the bank does not debit the amount from the customer's account until the check is deposited or cashed by the recipient. A cashier's check is not the same as a teller's check , also known as a banker's draft, which is a check provided to a customer, drawn by the bank (the drawer), and drawn ...