We rarely come across checks in everyday life. However, they have not completely disappeared, and so it happens again and again that outstanding amounts are paid by check. You should pay attention to this when redeeming in times of online and direct banks. In this article, we read about How to cash a check?
While writing checks is a common practice in the US, they are almost extinct in Europe. Younger people, in particular, are probably wondering: Are there any checks left in Austria? The answer is: yes – but they are very rarely used. Nevertheless, it happens that a check is issued for outstanding payments, for example by health insurance companies or insurance companies. However, many, especially younger customers, are not at all familiar with how they work. Especially since more and more customers are using direct banks, which do their business almost exclusively online. In quite a few cases, a check is therefore not cashed and the payment never reaches the recipient. Even if checks are no longer used frequently, it is still worth knowing about them.
How does a check work?
A check is basically a piece of security that a customer uses to issue an instruction to transfer money from their account to a recipient’s account. The recipient is given the check and can cash it by presenting it to the bank. In order for a check to be valid, it must have a certain form: in addition to instructions on how to pay a certain amount, it must also include the date of issue, the credit institution of the issuer, and his signature. In order for a check to be legally binding, bank forms are usually used that can be easily filled out.
How can I cash the check?
If you receive a check as payment, you have to cash it at the bank counter. This applies to both personal checks and crossed checks. As the name suggests, personal checks are paid out in cash at the bank counter. Preferably at your own house bank, but in principle, you can do this in any bank branch. However, foreign banks usually incur fees that are deducted from the check value. Today, however, crossed checks are much more common. These are not paid out in cash but are credited to the recipient’s account. Crossed checks can therefore only be paid at the bank with which you have a current account.
Often an extra form has to be filled out to cash the check. These check deposit forms are available in the bank branches. All the information required for this, such as the issuer’s account number, can be found on the check itself.
Special case: cash American checks
In the USA, unlike in Europe, checks are still relatively widespread. So if you have ties to the United States in one way or another, the chances are you will get one. You can also cash US checks in Austria, but not necessarily at every bank. The processing of foreign checks usually takes much longer and can take several weeks. Another catch: As a rule, there are fees for cashing foreign checks, which can be relatively high.
Can checks be cashed online?
Checks therefore usually have to be cashed in a bank branch. Today, however, direct banks or online banks with no or only very few branches are widespread. So what if there is no branch of your own bank on-site? In fact, it is not possible to cash a check purely online, as the bank must have the original document. As a customer of an online or direct bank, you must therefore send the check-in.
How exactly the path to redemption looks like differs depending on the bank. You can find the address to which you have to send the check on the website of your bank. Usually, this is the central seat of the bank. Some banks – like the branch banks – also require a completed submission form. In this case, you can also find it online for download. It is imperative that you follow the instructions on the website of your respective bank carefully to make sure that the amount can actually be credited.
Tip: By sending the check, you will lose the original document. It is therefore essential to secure yourself and make a copy of the check if the original is lost.
However, there is bad news for customers of purely online institutions that do without branches completely, such as N26 or Fidor Bank. There is currently no way of cashing a check with them.
Note the redemption period and cover confirmation
If you receive a check, it is best to get it cashed as quickly as possible. Checks cannot be redeemed forever, but rather have a relatively short deadline: domestic checks should be cashed within eight working days. Checks made out from other European countries within 20 days, from the rest of the world 70 days. After this period, banks can still cash the check but are not obliged to do so.
Also important: it would be better to wait for confirmation of funds on the check before you spend the money. Banks usually transfer the amount to your account within a short period of time. The money will be visible on your bank statement after just one or two days.
However, the amount is usually marked with the addition “Check receipt reserved”. The bank first has to make sure that the check issuer’s account is really covered, which in turn can take a few days. Before that has happened, you can already dispose of the money paid out. However, if it turns out that the check issuer’s account is not covered at all, the bank may withdraw the amount. To be on the safe side, you should wait for the confirmation of coverage.
Checks will probably not be used very often in the future either. If they are used anyway, it is not uncommon for recipients to let them expire. Before you give away money, it is always worth knowing how to redeem it correctly.
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