Some say we live in a cashless society, and to a large extent, we do. You may regularly use your debit card or credit card to purchase goods and services, pay bills online or send money to your kids via Venmo. The ability to write checks from your checking account still is useful, however. There are some situations where you need to write a paper check, such as to pay a contractor who doesn't take card payments. Whether you're writing a check for $1, $100 or $1,000, the process is exactly the same.
Make Sure You Have the Dough
Before writing the check, remember the golden rule of checking accounts — you must have enough money in your account to honor the check. If you don't, the bank will bounce the check and hit you with a hefty fee, typically $30 or $35. Bounce too often, and the bank may close your account. That's not the end of it, though. Businesses get charged a $25 to $50 bank fee, known as a returned deposited item fee, when they attempt to deposit a bounced check. Many merchants will pass this fee onto you, and some may charge more on top of that.
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Fill Out the Basics
Assuming you're good to write a check, start by choosing a pen with permanent ink, preferably black or blue. Fill out the check from the top so the ink doesn't smudge. Write the date in the date area at the top right corner. Then, write the name of the person or company you're making the check out to after the words "Pay to the Order of."
Fill Out the Dollar Amount
In the dollar box, write "1,000.00"; the dollar sign is already there for you. It really doesn't matter whether you include the comma or not as long as the meaning is clear. However, it is a good idea to fill the box or write closer to the left-hand side to stop someone from adding an extra number, for example, changing "$1,000" to "$11,000." Next, write the dollar amount in word format. You have various options: "One thousand dollars even," "One thousand and 00/100" which means there are no cents payable, or just "One thousand" with a line running from the word "thousand" to the printed word "dollars" at the end of the line.
Add Your Signature
Write a note on the memo line in the bottom left portion of the check. This step is optional, but it's useful for jotting down any additional information the payee may need. For example, you might write "Rent March 2018" or "Invoice reference 83480." Sign your name in the bottom right portion of the check. This makes the check official. The payee can now present it for payment.
The $1,000 Question
There is no limit on the amount of money that you may write a check for, provided the funds are available in your account. However, many businesses will ask that you get a cashier's check for large amounts of money. That's because the bank guarantees payment of a cashier's check so there's no risk the check will bounce. When you buy a house, for example, the escrow company likely will not take a personal check for the earnest money deposit. Cashier's checks cost around $10 but if you lose the check, you can get a refund and the bank will issue new check. If you lose a personal check or cash, you have no such protection. That makes a cashier's check the safer option for large amounts of money.