Crossed check & Co: an overview of the check types
The check is one of the oldest means of payment in the world. Different types of checks are used around the world for different purposes. In this guide you will learn everything you need to know about check types, their use and their special features.
Checks are primarily a security instrument that contains a money order to a third party. Payment is made by the check issuer’s bank to the holder of the check. This means that checks are mainly used for payment transactions.
The prerequisite for a successful check cashing is that the issuer’s account has sufficient funds. If there is no cover, a bank can refuse to pay out a check.
This is how a check is cashed
As a rule, a check is a document that authorizes the purchaser to do two things: On the one hand, he can initiate a payment from the check issuer from his or her account and, on the other hand, he has the right to request this payment from a bank.
The usual process for a check is as follows:
The check issuer fills out the check, be it from bank or checks online. There he enters the amount that the recipient is to receive, depending on the check, he deposits his name and signs the document.
The recipient receives the check and goes to his or her bank. Depending on the type of check, it can then be paid out in cash after submission or offset against the recipient’s current account.
Usual areas of application
- Payment of salaries or wages
- With a check, wages can be paid out cashless. The employee cashes his paycheck himself at his bank.
- Payment for goods
- Sales and purchases of goods can be covered by checks. They are redeemed upon receipt of the goods.
- Depositing deposits
In some cases, it is possible to deposit larger amounts of deposit as a check for short-term rentals of vehicles or real estate. Similar to a cash deposit, the check is cashed by the owner if necessary.
Alternative to cash or bank transfer
For a long time, the check was the only way to make cashless payments when shopping. Checks could also replace bank transfers. Today, online transfers or EC cards are used instead.
Payment of surpluses or damage from insurance
Many statutory health insurance companies use personal checks to pay out surpluses to their members. Some insurers also send the money for damages to their customers in the form of a check.
Personal check
Will not be paid out in cash, but transferred to the recipient’s current account.
Advantage: high security and traceable transaction.
The crossed check, or V-check for short, is a check that may not be cashed. It is only issued to a specific recipient, who can have the amount of the check paid to his or her current account. It usually takes between three and nine working days to cash a crossed check. This is how long the banks take to ensure that the issuer’s account has sufficient funds for the transfer.
Usage
Anyone with a valid current account with sufficient funds can issue a crossed check. The check is cashed at your own bank. Crossed checks prevent improper use, as the check cannot be redeemed anonymously. At the same time, the transaction can be precisely traced by transferring it to the recipient’s current account. If a crossed check cannot be cashed due to insufficient funds from the check issuer, the recipient has the right to enforce his claim in court. Only order checks are even more secure.