Introduction to Checks in the U.S.

In the U.S., personal checks are usually linked to a checking account. You can pay someone by writing them a check, and the recipient can get the money by cashing or depositing the check. Of course, the money will be deducted from your checking account. Checks are used in many situations, from paying at a grocery store to making a large purchase like a used car.

Common types of checks include:

  • Personal Check: written by the account holder, with funds deducted from the account holder’s own account when cashed
  • Certified Check: issued by the bank, with funds deducted from your own account when cashed
  • Cashier Check: issued by the bank, with funds deducted from the bank’s account when cashed

The latter two are generally used for larger transactions between individuals, since they serve as proof from the bank that you have sufficient funds in your account. When I bought a used car, for example, I got a certified check from the bank for the seller. Personal checks, the first type, are the ones most people see and use most often, so this article mainly covers how to use and fill out personal checks.

How to Fill Out a Personal Check

Here are the fields you need to fill in on a typical personal check:

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  • Date: Enter the date you are writing the check
  • Payee name: If the check is for an individual, write that person’s name. If it is for an organization or institution, such as a school, write the name of that organization
  • Amount (numeric): Write the amount in numbers here, for example 100.51
  • Amount to pay: Starting at the far left of the line, write the amount in English words. The standard format is to write the dollar amount in words for the part above $1, then draw a line and write the cents portion as a fraction out of 100. For example, 100.51 would be written as: One hundred and——51/100. If there is no amount under $1, draw the line all the way to Dollars
  • Memo: Optional. This is usually where you note the reason for the payment for the recipient or for your own records, if you keep a copy
  • Signature: Sign your name here. It needs to match the name of the owner of the checking account linked to the check

Below is an example of a completed check.

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The two groups of numbers below that you do not need to fill in are your checking account number and routing number

How to Cash a Check

After someone gives you a check, it is best to cash or deposit it as soon as possible, since checks usually have an expiration period. Common ways to cash or deposit a check include:

  • Deposit it into your own account: You can deposit it at a bank branch, at a bank ATM, or by using your bank’s mobile app to deposit it by photo
  • Cash it at a retailer: At Walmart, you can cash a check directly for cash (identity verification required)

Before cashing or depositing a check, one thing you must do is sign the back of the check, which is called endorsing it. One thing to keep in mind: it is best not to sign it until you are ready to cash or deposit it. In general, there are three common types of endorsement:

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  • Blank endorsement: This is the most common type. Before you deposit the check or cash it at Walmart, simply sign your name on the back
  • Special endorsement: This is generally used to transfer the check to someone else. This kind of check is also called a third-party check. First write “Pay to the order of” and the other person’s name, then sign your own name
  • Restrictive endorsement: Sometimes you may need to mail a check to an institution for deposit. In that case, you can write "For deposit only to xxx" and then sign your name. That way, even if the check is lost in the mail, whoever finds it will not be able to cash it

Most people only need the first type of endorsement when depositing a check. If a check is mailed to your parents or other relatives and you want to deposit it into your own account, you may be able to do so by endorsing it according to the special endorsement rules. However, some credit unions may not accept this kind of third-party check because it could be a bad check.

How to Get Checks

Generally speaking, after you open a checking account at some banks, the bank will give you a certain number of free checks. For example, checking accounts from Discover and BofA come with some free checks. But some banks do not provide them—for example, Chase checking accounts do not. If you do not have checks or have already used up your free ones, you can pay the bank a fee to order a checkbook. Of course, you can also buy generic checkbooks online by entering your checking account number and routing number when ordering (both of these will be printed on the checks). You can also buy customized checkbooks online with your own background design or patterns, such as:

No matter where you get your checks, before giving one to someone else, you should confirm that the account number and routing number are correct to avoid writing a bad check. The way you fill out and cash different styles of checks is otherwise the same.

Using Checks to Transfer Money

In addition to paying others, you can also use a check to transfer money between your own accounts. The method is simple: just write a check to yourself. Most bank apps now support mobile check deposit. Of course, if the amount you are transferring is too large, mobile deposit may not work, and you may need to use an ATM or go to a branch. One especially important thing to watch out for is the amount when writing the check. If you write too much by mistake, your account could go into overdraft, the transfer could fail, and you could incur a high fee. Check deposits and withdrawals do not deduct the money immediately, so be sure to leave enough in the account. Do not let your balance fall short by the time the bank actually processes the payment.

  • Pros: No extra forms to fill out; you can just deposit it into the other account; limits can be high
  • Cons: Funds may take longer to arrive; the bank may need around 3 days to clear the check, and it may also place a hold on part of the money to guard against bad checks; you need to be careful to get the amount right.

Summary

Even though electronic payments and online money transfers (Chase quick pay,PayPal) have become increasingly common, personal checks are still an important way to send money and make payments. It is still useful to understand how they work.

For introductions to other transfer methods, see: