Even though checks are no longer a common means of payment, they can still be used. What you should be aware of when issuing checks in order to comply with the formalities
Issue a check or crossed check – differences explained briefly
Checks are documents and according to the German check law tied to a form.
The certificate must have the word “check” and contain the name of the bank which is to be paid. This may only be a bank in which the issuer has a balance, ie an account. In addition, it must include an instruction to disburse a sum of money, the day and place of the check issuance and the signature of the check issuer.
Usually, the banks provide their customers with check forms that cover the mandatory formalities.
In addition, it is standard in these forms, in addition to a check number, the account details of the check issuer and the amount of money listed in numbers. If this differs from the advertised amount in words, the amount is in words.
As a rule, a distinction is made between personal check and personal check . Both are so-called bearer securities, in which the banks do not have to check the authorization of the check depositors.
A check is cashed in cash; but only at the issuing bank. The check depositor may also present the check to another bank. In that case, the amount will be credited to the check depositor’s account.
The clearing check contains the note “Only for clearing”. If the check holder wants to redeem this, this will only be done as a credit on his account. It is also possible to note on personal checks “Only for clearing” and thus convert the check into a bill of exchange.
If the check is to be issued to a specific person, you can have so-called order checks provided by your bank. These are on the right with a red box “order check”. Check issuers and claimants must sign an order check.
In Germany, checks are subject to a notice period of eight days. The period begins after the day, which is noted as the date of issue. The bank is required to cash a check during the presentation period, if the check is covered – so there is sufficient credit on the account of the exhibitor.
You should pay attention to this when issuing checks
You may only issue a check if you have sufficient credit or discretionary credit to fulfill your payment obligation.
If the account knowingly does not have sufficient coverage, this can be considered as a check fraud and may entail further legal or economic consequences.
Fill in the check carefully and completely. Otherwise, the check is ineffective.
Enter the amount in the amount field so that it can not be changed. Additionally enter this amount in words in the corresponding text box.
Make a note of the check number. If a check is lost or stolen, it can ideally be blocked by the check number before it is paid out.
A redeemed check can not be tracked in case of doubt. Therefore, it is advisable to issue checks as a crossed check if possible. So you can check, if necessary, on whose account the credit was credited.
You make a check for a crossed check, if you write down on it handwritten “Only for clearing”.
If you want to issue the check in the name of a specific person, have your check-in forms provided by your bank. Alternatively, on the check, note “With Order” and the name of the person.
Ask your bank if there are other individual features that you should consider when you want to issue a check.