A check is a type of financial instrument that is written out to another party as a payment for goods or services. When the check is presented to a bank, the amount of money indicated on the check is deducted from the account of the person who issued the check, and given to the person presenting the check.
Types of Information
Checks must include a date, the name of the person or organization the check is made out to and the amount of the check, written both in numbers and spelled out in words. Checks must also include the signature of a person who owns the account or is authorized to draw funds from it, and an endorsement by the person or organization depositing the check. In addition, checks must list the name of the issuing bank, and include MICR information printed along the bottom of the check.
MICR is an acronym that stands for "Magnetic Ink Character Recognition." The MICR information printed on a check provides the account number that the funds should be deducted from, as well as a routing number to identify the bank managing the account from which the check was written.
For a check to be valid, the amount of the check written in numbers must match the amount spelled out in words. The date must not be more than six months in the past, and cannot be a date in the future.
If required information is missing from a check, a bank may refuse to deposit or cash it. If a person attempts to deposit a check that lacks required information, there is a risk the check will later be returned unpaid, prompting the bank to remove the funds from the account where the check had been deposited.
When you are writing out a check at a store, the business might choose not to accept checks with certain serial numbers, and may require that your name, address, phone number or driver's license number appear at the top of the check. This is not information required by the bank, but rather a way for the business to protect itself in case your check is returned due to insufficient funds.