Checks are a form of payment that is made through accounting documents, with which the right is granted to a person or economic entity (company or institution for example), to collect the economic amount that is marked on it and that has been approved for this purpose, by the person who issues and signs the check, it being understood that the amount referred to in the document (check) will be taken from the account of the “releaser” (which is what the person who issues the check is called), in favor of the holder or beneficiary (who receives the economic-monetary benefit represented by the check), taking the money from the checking account held by the issuer of the check in a bank. It is a means of payment that serves to avoid making payments in cash,
With checks (which are payment titles), a person or company tells a bank or financial institution to pay a third party (person, company, institution, etc.), a certain amount of money, which will correspond to the amount stipulated in the check, and that will be deducted from the money held by the check giver, in the checking account that the giver already has with the financial institution, (serving the bank as an intermediary in terms of cash payment between the account holder of the checking account that writes the check, and the payee of the check).
The check is a document that, being protected by law, confers on its legitimate holder the creditor status of the check’s issuer. It is also a document that allows the beneficiary or creditor to have the capacity to take legal action against the person who issued the check, if the amount stipulated in the check is not paid.
Main types of checks:
Bearer checks.- Bearer checks are those that do not have the name of the beneficiary indicated (whether this is a person or the name of the representative of a company or institution that benefits from the check), so they can be charged at the bank by the person who is carrying it at the precise moment of being charged.
Checks to order.- Checks to order are checks that can only be cashed by the beneficiary to whom said check was made, which is specified in the document, that is, it will be payable to whoever appears as its legitimate holder, ( beneficiary).
Conformed check.- Conformed checks are those that have a conformity clause on the back. Thanks to this clause, the bank records that there is a sufficient balance in the checking account, withholding said balance to pay them to the check that is presented to the bank to be cashed. With these checks, the bank withholds the funds from the account corresponding to the amount of the check, not being able to dispose of such money for other purposes (only to settle said check).
Crossed checks.- These checks have on the back two parallel straight lines and a diagonal, where the bank entity in which it can be changed into cash can be detailed, in the event that the beneficiary of the check is a client of the financial entity itself. , in the event that this is not the case, the payment will be made through and deposit on account.
Bank check.- In these checks the bank acts not only as “drawn”, but also as liberator, issuing the bank the check itself, forcing itself against the beneficiary of the check to pay the amount designated in it, these checks they are carried out at the request of the bank’s client who would have acted as “releaser”.
Window check.- They are checks issued by the client of a bank that does not have a current account in said bank, but does have money deposited in said bank, so when making a transfer, you must “buy” a check to the bank, which the bank does in exchange for a commission to make the payment.
Traveler’s check.- This type of check is issued to avoid the circulation of cash, issued in national or foreign currency and signed at the time of collection. That is, they are exchanged for cash in another country and at the same time are used as a means of payment.
Deferred payment checks.- These are those that function as a payment order made by the bank in favor of the beneficiary of the check, but which cannot be cashed immediately, but between one day and three hundred and sixty calendar days from their issuance. , that is, they cannot be charged the same day they are issued, but rather after a certain time (this usually happens to allow time for the checking account to have sufficient funds to cover the debt contracted with the check in question).
Certified check.- It is the one where the bank certifies that the check has sufficient funds to be able to be duly collected, reserving said funds for effective collection.
Cashier’s check.- They are those that are issued by a credit entity and that can only be paid within the branches of the financial or banking institution.