Some banks make a charge for deposits, where a man makes a convenience of them by depositing money which he checks out in a short time.
A depositor, when opening an account with a bank is required to place his signature in a book kept for the purpose. Until the bank officer, the paying teller, becomes familiar with the signature on the check, he verifies it by comparing it with that in the book.
HOW TO PREPARE A CHECK
A check may be defined to be "a written order on a bank directing it to pay a certain sum of money to the person named in the check or to his order, and signed by a depositor."
So long as the purpose is clearly conveyed in the writing no particular form of words is necessary, nor need the paper on which the check is written be the regular printed form properly filled in.
The "drawer" is the one who makes the check.
The "payee" is the one for whom the check is made.
In making a check, the best plan is to fill out the stub first, and from the data on it make out the check. This tends to accuracy.
Be sure to number your check, beginning with I.
Be sure that the number on the stub is the same as on the check.
A person having money in bank and wishing to draw for his own use, makes his check payable to "self" or to "cash."
Usual form of check:
First National Bank. No. 27 Kingston, Vt., Oct. 13, 1910.
Pay to order of John Smith Seventy-five 75/100 ------ dollars.
$75.75 George F. Brown.
It is proper form to specify on the face of the check the purpose for which it is given, but while this is permissible it is not usual.
Write the amount of the check first in words then in figures. This makes more certain the amount.
Always begin first word of amount close to left-hand side of check; when the whole sum is written down draw a heavy stroke along the line to the word "dollars."
When a check is made payable to John Smith or order, John Smith must sign his name on the back of the check--left-hand end and about an inch from the top.
Never sign a check until you are ready to collect, or to bank it.
The payee can endorse the check to another by writing on the back as follows:
Pay to the order of Thomas Brown.
John Smith.
A check payable to "bearer" may be negotiated by any one. When such checks are presented by a stranger, at the bank of the maker, the paying teller always insists that the stranger be identified.
Never make a check payable to "bearer" if it can be avoided.
Sometimes checks are dated ahead, for reasons satisfactory to the maker and payee.
A check drawn on August 5th, but dated August 20th cannot be collected till the latter date.
Never date a check ahead unless you are positive that you will have the money in bank to meet it on the day named.
Never, if you can avoid it in trade, receive a post-dated check.
Cash or deposit your checks as soon as possible after they are received.
If the bank should fail, while you are holding the check, the maker cannot be held for the loss.
CERTIFICATES OF DEPOSIT
Often when a depositor is travelling, he finds it convenient to carry with him a form of paper that is as good as cash, and much better in the event of loss.
Banks will issue "certified checks" to depositors. These checks are stamped by the bank "certified" with the date and officer"s signature attached.
On issuing such a check, the bank debits the receiver"s account with the amount, and so can guarantee the payment whenever or wherever presented.
Such a check may be received with as much certainty of its value as if it were a bank bill.
When a person places money in a bank with no intention of checking it out for some time to come, he may have issued to him a "Certificate of deposit."
While holding this certificate he cannot check against the money in the bank.
The holder of a certificate of deposit may transfer it.
The money may be paid in part by the bank, if the certificate is presented, and the amount is endorsed on the back.
To withdraw all the money the certificate must be surrendered.
USE OF CHECKS
There is no form of commercial paper in such general use as the check.
The total of all the checks in use at some seasons is far more than the total of all the money in all the banks.
Checks are balanced in the money centers through what are known as clearing houses. In these a bank is charged with checks against it and credited with those in its favor.
The differences are settled by cash.
Often a few thousand dollars will settle check accounts amounting to millions.
If by any chance you should receive a check in which your name is misspelled, or not given as you write it, endorse the check exactly as the name is written on the face, then add your name in the regular way.
CHAPTER IX
SAVINGS BANKS