Tuesday, September 3, 2013

Bank Checks vs. Personal Checks - Which is the Better Option?

Whenever you buy something different payment methods may be required. Some of them may ask you to pay with a bank check while in other cases a personal check may be more suitable. If you’re new to banking or just given the opportunity to handle your finances for the first time, it’s essential that you understand the difference between the two, because while they are both checks, they’re not the same thing. 

Before you can decide which one to use, it’s important that you understand the difference between them to avoid mistakes. 


Understanding Bank Checks


Bank checks are known by many names such as bank draft, cashier’s check, teller’s check or an official check. They all refer to the same thing so there’s no need to be confused. A bank check is usually considered as cash because it is withdrawn from an account and the money is immediately withdrawn. It’s the reason why these types of checks are known as guaranteed checks.

The only instance when a cashier’s check isn’t guaranteed is if it’s discovered to be fraudulent. If that happens, the bank is given a couple of weeks to revoke the money from the check. If you want to use a bank check, you have to ask for it from your bank. When you do, the funds will be withdrawn and you can sign the check. The cashier will also sign the check. This procedure is standard almost everywhere. 

Understanding Personal Checks


A personal check is payment that is drawn from your account. However it isn’t guaranteed until it’s cleared and presented by your bank. In short, there’s a bit of risk involved here compared with a bank check. 

Before you can use CheapChecksPlus you need to know a personal check’s individual components. These include the account number, routing number, signature line, the amount you are issuing, the payee, the check number, date and contact information.
 

Which One to Use? 


Now that you know the difference between the two, you’ll be in a better position to determine which one to use. Generally speaking, bank checks are more suitable for formal and legal transactions while a personal check is more appropriate for everyday dealings.
 
A personal check for instance, may be used for to pay for your utility bills, tickets to shows, your groceries, clothes and more. A personal check in short, can be used to pay for many items you usually pay for with a credit or debit card.

But there are some instances when a personal check isn’t acceptable and only a bank check will do. This usually takes place if you’re putting cash down for a property or rental pay. In addition, landlords will demand a security deposit and the rent for the first and last month to be a cashier’s money order check. In other words, a property seller or landlord wants guaranteed funds, so a personal check won’t do.

Most auto dealers accept a personal check, but for the last pay off they’ll usually ask for a bank check. Also, if your tax obligations or insurance premiums are late, you will be asked to send a bank check instead of a personal one. 

As you can see, personal and bank checks each have their own respective uses, so you need to look at the circumstances to see which one is applicable. Bank checks are essential for a lot of business tasks, but for most everything else, a personal check will be fine. But do keep in mind that the use of a personal check has been waning somewhat as more people prefer to use a credit card.

Author Bio: Gerda D. Dorsey is a freelance writer who has authored hundreds of articles related to banking, personal checks and finance. Aside from writing, Gerda also works as a consultant for several financial firms. She lives in Houston, Texas. She also recommends CheapChecksPlus Personal Checks.


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