Converting Your Check into Cash

2007-03-08 10:33:40

( Financial )



What are Checks?
A check is a draft upon a bank account. The maker, through the check, orders the bank to pay a sum of money. Checks can specify to whom the money is to be paid, and when. A check can also specify that it is to be paid to the order of cash, in which case, anyone can cash the check. When a person is specified in the check, only that person can turn the check into cash. The date on the check determines when the order to pay becomes effective.

How do I Convert a Check into Cash?
A check can be converted into cash by presenting it to the bank, and complying with any of its requirements. This is the act of cashing a check. Another way of converting your check into cash is by indorsing it for a sum of money. In practical, not strictly legal, terms, it may be described as a "sale" of a check. A check may be indorsed only by the person specified as the payee in the check. Indorsement is done by placing a signature at the back of the check. This will indicate the consent of the payee for the check to be cashed by another.

Why Would Anyone Give Money In Return for an Indorsed Check?
A person might be interested in giving cash in return for an indorsed check because of an agreement to give less than what the check is worth. If the check bears a date that is two weeks away, you cannot turn the check into cash by presenting it to the bank until then. However, if you are in dire need of money, you consider indorsing it at a discount to an interested person. This will allow that person to receive cash for the check in two weeks, thereby making a profit. In the meantime, you received the money you required.

What is a Money Market Checking Account?
A money market checking account is an account that offers higher interest rates because your money is invested in money market placements while on deposit. There are limitations on your account, such as a limit on the frequency of withdrawals, and a limit on the amount of checks you may issue each month. A money market checking account also requires a high minimum initial deposit, and maintaining balance.


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