So, you finally sold that mountain bike collecting dust in the garage. Or maybe you received your security deposit refund after hours of meticulously cleaning your rented apartment. Either way, the situation is the same: Someone cut you a check. Now what?
To some, checks may feel like an archaic form of payment. And if you agree with this sentiment, you’re not alone: Check payments fell at a rate of 4.4% annually between 2012 and 2015, according to a 2016 study from the Federal Reserve. But you might be surprised to learn that there were a total of 17.3 billion check payments in 2015 alone, according to the same study. Like it or not, checks are still widely used today.
Whether you’ve simply forgotten how to find your account number on a check or you’re reading a check for the very first time, refer to this handy illustrated guide.
How To Read a Check: A Visual Guide
Reading a check is simple. Use the following diagrams to understand the different parts of a check and what they mean.
1. Personal Information
In the upper left-hand corner of the check, you will find the personal information of the person who wrote the check. This typically includes their name and address.
2. Payee Line
On the payee line, you’ll find text that reads “Pay to the order of.” On this line, the person who is writing the check designates the payee, which is the party to whom the money is to be paid. If the check is made out to you, then you’re the payee, and you’ll need to endorse the check by signing the back when you’re ready to cash it. Once you’ve signed the back of the check, anyone can cash it. Be prepared to deposit the check when you endorse it.
Learn: How To Endorse a Check
3. The Dollar Box
Here, you’ll find the amount that the check is worth in numeric format.
4. The Amount of the Check
The check amount is written out in words on this line. The cents will still be in number format, however: The amount line would say “Twenty dollars and 65/100” for a check that amounts to $20.65.
If there is any room left over above this line once you’ve written out the amount, you can strike through the remaining space to avoid anyone tampering with the amount.
5. Memo Line
It’s optional to fill out the memo line, but it’s good practice for keeping track of check payments. Here, you’ll find the reason for the transaction. For example, a renter could write “July 2019 rent” on the memo line when they are cutting a check to their landlord.
Must Read: Don’t Get Caught in These Check Scams
6. Date Line
On the date line, you’ll find the date the check was written. Sometimes, the paying party will postdate the check to indicate when the payee should cash it. For example, one may write a check on March 5, but their account funds aren’t available until March 15.
Although the payee could potentially take this as a direction to wait before cashing a check, the check is valid from the moment it’s signed by the issuer, and the payee doesn’t have to wait until the date on the date line to cash the check. If the payee attempts to cash the check before the date on this line and the check bounces, the person who wrote the check may face a penalty.
7. Signature Line
The issuer will sign this line to authorize the check.
8. Bank Name
If you have any questions or concerns about a check, you can contact the bank that is listed here.
9. Bank’s ABA Routing Number
The ABA routing number is a nine-digit number assigned to your bank by the American Bankers Association. This indicates the bank through which the funds will be withdrawn.
You’ll also use your ABA routing number to set up direct deposit and recurring payments. Some banks will have more than one routing number depending on their size, so always make sure you’re using the correct routing number before setting up these types of payments. You can also find your routing number using the ABA routing number lookup tool.
10. The Account Number
The account number is associated with the checking account from which the funds will be withdrawn.
More Tips: How To Write a Check in 6 Easy Steps
11. Check Number
The check number is used to identify the individual check. It helps the issuer keep track of which check they are writing.
12. Bank’s Fractional Number
The fractional number toward the top right of your check contains numbers that correspond with your bank, such as your routing number. Because these numbers are readily available elsewhere on the check, the fractional number isn’t widely used anymore.
Reading a Check Is a Useful Skill To Have
Technology has given rise to many fast, convenient alternatives to checks. In a time when there are so many money transfer apps — PayPal, Venmo and Zelle, to name a few — you might wonder why checks are still so widely used. For starters, you can give a check to anyone. Not everyone knows how to use cash apps, and some people don’t have a mobile phone or computer. And some people just like the simplicity and time-tested reliability of writing a check.
When compared with cash, checks are much more secure. If your wallet is stolen, your cash is probably as good as gone. If you’re sending money as a birthday gift to your niece, you’d risk losing that cash as soon as you put the letter in the drop box. Yet checks pose a whole different set of security issues: Anyone who gets their hands on one of your checks now knows your name, address, bank information and account number. These are a few factors to consider when you pull out your checkbook.
No matter how you prefer to do your banking, being able to read a check is a good skill to have. And if you find yourself on the giving end of a check, reference GOBankingRates’ guide on how to write a check.
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