Can I cash an insurance check?

Crossed checks still exist, but they have become rare in the age of electronic banking and cashless payments. They can be used by private individuals as well as by companies. The advantage of the crossed check is that it cannot be paid out in cash when presented, but must be credited to an account - current account or savings account. This makes abuse more difficult, as the beneficiary can be identified.

What is a personal check?

In order for a crossed check to be valid, it must meet an eighth criterion in addition to the seven classic criteria that a check must have. In principle, any piece of paper can act as a check, provided it meets the following conditions:

  • The word “check” must appear in the text on the document.
  • The name of the bank that is instructed to make a specific payment must be given (referring institution).
  • The amount of money that is to be paid out must be specified in numbers and words. In case of doubt, the advertised amount applies.
  • The text must contain the binding instruction, for example “pay when you present this check”.
  • The date of issue must be named.
  • It must be clear where the check was made out.
  • Without the signature of the debtor, the check is worthless.

If the document contains all of these criteria, it is a legal check, but it can be paid out in cash. In the case of a crossed check, there is therefore an eighth criterion. This type of check must have the three words “only for settlement” printed or written on it. This passage was usually written across at the top left. Not regulated by law, but commercially recognized were also two parallel lines that also run diagonally across the top left of the check form.

Credit is subject to change

If you have a crossed check credited to your account and want to have the amount immediately available, you must expect that this will not be possible. The credit to the account of the beneficiary is subject to the condition that the bank of the check issuer can actually debit the amount from the account of the issuer. The period for the availability of the credit is up to ten days.

Alternative to crossed check: order check even more secure

While a crossed check already offers the parties involved a certain level of security, this is even higher with an order check. This check may only be cashed by the beneficiary whose name is mentioned in the name line only available for this check variant. All other types of checks can also be given to third parties by passing them on, the endorsement. For example, merchant A pays an invoice at B with a check. B owes C the same amount and endorses the check received from A to C. This allows C to cash the check. A check, regardless of whether it is a cash, crossed or order check, is not, however, a variant of the credit.

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