Banking

Negotiable Instruments written document giving right to the transferee Notes- written promise by the maker to pay money to the payee Types of notes - Demand, time, installment. Certificate of Deposit – bank note

Drafts an order to pay money. Drawer order the drawee to pay money to the payee. Types of drafts – sight, time Check – common draft payable on demand

Requirements of negotiability: Written Written Signed by maker Signed by maker Unconditional promise or order to pay Unconditional promise or order to pay Fixed amount of money Fixed amount of money Payable on demand or at a definite time Payable on demand or at a definite time Payable to order or bearer Payable to order or bearer Date on which instrument received is date of issue Date on which instrument received is date of issue Handwritten words control figures and printed and typed words except when not clear. Handwritten words control figures and printed and typed words except when not clear.

Checking Accounts most common kind of negotiable instrument providing convenient receipts and safety in transferring of money. Banks are required to pay money on demand to the bearer of the check. A check that is more than 6 months old is a stale check and may no longer be negotiable.

Balancing your checking account – requires you to compare your bank statement with your check register and account for outstanding checks and any deposits that have been made but not recorded yet by the bank. Drawer- person who writes the check Drawer- person who writes the check Drawee – the bank Drawee – the bank Payee – person whose name appears on the check. Payee – person whose name appears on the check.

Take care in filling out a check. You are liable for a forged check if you are negligent in completing the check.. Take care in filling out a check. You are liable for a forged check if you are negligent in completing the check.. Words on the check prevail over numbers. Words on the check prevail over numbers. Writing Void on a check will make the check non-negotiable. You would need to write this in big letters across the face of the check if someone asks you for a check from your checking account for their records. Writing Void on a check will make the check non-negotiable. You would need to write this in big letters across the face of the check if someone asks you for a check from your checking account for their records.

Bad check is a check written on insufficient funds. Could be considered larceny if done intentionally. Fees are charged for bad checks. Bad check is a check written on insufficient funds. Could be considered larceny if done intentionally. Fees are charged for bad checks. Forged Checks – signed by someone other than the owner of the checking account w/o the owners knowledge. Banks are liable for forged checks if the drawer was not negligent. Forged Checks – signed by someone other than the owner of the checking account w/o the owners knowledge. Banks are liable for forged checks if the drawer was not negligent. Stopping payment on a check can be done by request and is binding for 14 days or longer if put in writing. The bank will not draw funds from the account the check is written on. Stopping payment on a check can be done by request and is binding for 14 days or longer if put in writing. The bank will not draw funds from the account the check is written on.

Certified Check – a personal check or draft of the drawer that is stamped certified by the bank. The bank holds the funds from the account for the payee and guarantees those funds to payee. There is a fee for a certified check.. Sometimes between $10-15 Certified Check – a personal check or draft of the drawer that is stamped certified by the bank. The bank holds the funds from the account for the payee and guarantees those funds to payee. There is a fee for a certified check.. Sometimes between $10-15 Cashier’s Check – – a draft issued by a bank drawing upon funds it has on deposit. More secure for Payee. Drawer deposits money with a bank and purchases a cashier’s check. There is a fee for a cashier’s check. Sometimes between $10-15 Cashier’s Check – – a draft issued by a bank drawing upon funds it has on deposit. More secure for Payee. Drawer deposits money with a bank and purchases a cashier’s check. There is a fee for a cashier’s check. Sometimes between $10-15 Bank draft – a draft issued by a bank drawing upon funds it has on deposit in another bank. Bank draft – a draft issued by a bank drawing upon funds it has on deposit in another bank. Money Order – a draft written by a bank, Post Office, and other select stores. Purchased for a fee the money is drawn from the funds of the business that issues it. Money Order – a draft written by a bank, Post Office, and other select stores. Purchased for a fee the money is drawn from the funds of the business that issues it. Traveler’s checks – financial institution is the drawer and the drawee Traveler’s checks – financial institution is the drawer and the drawee

Regulation CC dictates when funds are made available for a presented check.. Also known as the float Regulation CC dictates when funds are made available for a presented check.. Also known as the float Electronic Funds transfer(EFT) and Debit Cards(Check Card) make funds available to payee immediately. Electronic Funds transfer(EFT) and Debit Cards(Check Card) make funds available to payee immediately.

Transferring Checks Indorsement – placing your signature on the back to transfer it to another. Indorsement – placing your signature on the back to transfer it to another. Types of Indorsements: Types of Indorsements: Blank: Payee(Bearer) signs back of check. Is negotiable and can be cashed by holder Blank: Payee(Bearer) signs back of check. Is negotiable and can be cashed by holder Special: Words “Pay to the Order of” is written and followed by the name of the person who the instrument is to be transferred and the signature of the indorser. Special: Words “Pay to the Order of” is written and followed by the name of the person who the instrument is to be transferred and the signature of the indorser. Restrictive: Words used to limit use. “For deposit only” Must be deposited to the indorsers bank account Restrictive: Words used to limit use. “For deposit only” Must be deposited to the indorsers bank account Conditional: Words used that demand an event or condition occur for the instrument to be negotiable. Conditional: Words used that demand an event or condition occur for the instrument to be negotiable. Qualified: “Without recourse” Used to limit liability upon indorser. Qualified: “Without recourse” Used to limit liability upon indorser.