Check Definition

A check is a promissory note for payment. A check instructs a bank to pay a specific amount of money out of a specific account. Checks are often partially hand-written and usually specify the payee—either an individual or a business; the payment amount in numerals and written out; the date of writing; and a signature of a person authorized to issue checks against the account. Most checks are also printed with the issuer’s name, address, and often telephone number; the represented account’s number; and the type of currency which the amount represents (e.g., dollars). There are several types of checks: an "order" check is payable only to the named payee and usually bears the inscription "pay to the order of…"; a "counter" check is usually largely blank and is used for new accounts only—they are often not accepted at stores; a "bearer" check is payable to anyone who presents, or bears, the check; and a "paycheck" is received as payment for work performed under contract. While the term "check" generally is used to refer to draft notes on all types of financial institutions, technically a draft on a credit union is a "share draft"; a draft on a savings and loan association is a "negotiable order of withdrawal"; and a draft on a government payroll account is a "payroll warrant". The general use of checks is in decline—most payrolls are electronically deposited, most commercial sales are now negotiated with debit or credit cards, and ATMs make cash readily available. Knowingly or deliberately writing a bad check is considered a type of theft and has grave legal consequences.