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What do the parts of a check mean?

Published June 19, 2018

It's hard to imagine a piece of paper signifying value in 2018, but it seems that checks are here to stay for some transactions in the short term and maybe even longer term for business through the mail. How have checks lasted through the digital transformation and what do all the parts mean?

In the top left, the name and address of the account holder reveal varying amounts of information depending on the check. These are really just for convenience and can be customized when ordering checks; you can choose to reveal only your first initial and last name, or redact parts of your address. Generally, check ordering companies allow you to specify this information and don't validate it against the information they have on file for the account holder.

Typically, there will be a few items in the top middle, including the logo and contact information of the issuing financial institution and what's called a "fractional number", representing the geographical location of the issuing bank and its routing number.

In the top right, the check will have a check number and a line for the date. Check numbers are sequential and typically start from 100 when a new account is opened; there is no penalty or inquiry from your bank if one or more checks in the sequence are skipped. The date, however, matters: banks are expected to be strict about their acceptance of post-dated checks; if the date of the check has not yet happened, there's a very high likelihood that the check will be rejected.

Below the personal information, a line captioned "payee" represents the name of the person for whom the check is intended. When depositing or cashing a check, the bank usually validates that the person performing the transaction is, in fact, the person to whom the check has been made out. Sometimes an account holder will make a check out to "cash", which is very risky because the bearer, usually without identity verification, is able to use the funds from the check. (Notably, most banks will only accept or cash checks from account holders, and will have a maximum that will be released before the check officially clears.)

To the right of the payee is a box for the numeric representation of the check's amount. Entering information as close to the left of this box as possible is usually advisable so that someone can't add additional digits and increase the check's value.

Below the payee line is a place to write the amount of the check in full words. This additional verification step allows banks to ensure that the numeric and text representations of the amount are equivalent and reduce potential fraud. Different people have different styles for check writing and banks have loose expectations for how the text representation will be structured. "Forty dollars and no cents" is acceptable, for example, as would be "Forty dollars and 00/100".

The memo line represents an unofficial note; if the check (or an image of the check) is returned to the issuer after being processed by the recipient's bank, this memo might represent the reason for having issued the check to aide in accounting.

At the bottom right, the check will have a line for the signature of the issuer. Usually banks will enforce that the check needs a signature, so it can be very inconvenient when this part is omitted by the issuer.

The very bottom of the check is the machine-readable information needed for banks to quickly validate and process checks. Check processing was an early convert of the digital transformation; before OCR (optical character recognition), checks used MICR ink, with actual magnetic ink to convey information from the check to the machine scanning it. MICR ink is still occasionally used, but with most checks being processed through digital images, there's much less emphasis on special ink for checks.

The routing number (specific to your financial institution and, sometimes, representing a bank's acquisition of another bank to expand into a new geography) and account number are what actually connect the check to the issuer's bank account. Often, the check number will also be repeated in a machine-readable format at the bottom of the check.

Knowing the information present on a check is a great way to make sure that you can spot anomalies. In this digital age, it's still preferable to pay for transactions with an instant digital transfer, but sometimes that convenience is unavailable. In these cases, checks still provide a relatively easy way to transfer money.