Check Named: Complete Guide

In Brazil, checks are still widely used for payments, especially between companies. Therefore, certain security precautions are necessary to ensure they are cashed correctly. A personal check is one such method.

In this article, we will provide you with all the necessary information so that you know what a personal check is and how it works, so that you can clear up any doubts when filling it out.

Stay tuned to the end and find out more!

What is a personal check?

A payable check is a type of check that has the payee's name specified on the "pay to the order of" line of the check. This means that only the person named on the check can receive the amount specified on it.

This type of check is a common form of payment and can be used for a variety of transactions, from bill payments and services to commercial transactions. It's useful for both the issuer and the recipient, as it offers security and reliability for both parties involved.

How does a personal check work?

A nominal check works in a very simple and straightforward manner, allowing the beneficiary to withdraw the amount specified in that document.

The bank, upon receiving the check, checks the “pay to the order of” line and verifies the person's name, requesting a document so that the check can be exchanged for cash.

This way, only the person whose name is specified can receive the check amount, ensuring greater security in the payment.

When should a personal check be issued?

A nominal check should be issued whenever possible, as it guarantees greater security of the title and exchange.

In general, people emit in the following situations:

• Payment for services or products: in commercial transactions, a personal check is a secure form of payment, as it clearly specifies the beneficiary of the payment and prevents errors or fraud.
• Rent Payment: When paying rent for a property, it is common to issue a check payable to the property owner, ensuring that payment is made directly to them.
• Salary Payments: Many companies use personal checks to pay salaries and benefits to their employees, ensuring that payments are made directly to the beneficiaries.
• Person-to-person money transfers: In financial transactions between individuals, a personal check can be a secure way to transfer money from one bank account to another.

Therefore, a nominal check is recommended when you want to clearly specify the beneficiary of the payment and guarantee the security of the transaction.

How do I leave a check in my name?

Issuing a check payable to a person is quite simple. It all depends on filling out the "pay to the order of" line with the name of the person who should receive the check.

Therefore, when filling it out, you must take some precautions:

• Check the name of the beneficiary.
• Fill in the check line “pay to the order of” with the person’s full name, as it appears on the document.
• Fill in legibly so that the bank can check the data.

Advantages and disadvantages of a nominal check

Check out a list of the advantages and disadvantages of writing a personal check:

Advantages

• Greater security when issuing a check.
• Certainty that it will be discounted by the correct beneficiary.
• Guaranteed payment of services and amounts and better control of checks issued.

Disadvantages

• If it is a “not to order” check, it can only be cashed by the beneficiary.
• Checks payable to “order” may be endorsed.
• The check is valid for 180 days.

What are the types of nominal checks?

There are basically three types of nominal checks. Check them out:

Crossed check

In this type of check, in addition to being filled in with the beneficiary's name, there are two parallel lines in the upper left corner of the check, indicating that the check can only be deposited into a bank account and cannot be withdrawn in cash at the teller's window.

A crossed check is a way to further increase transaction security and prevent fraud.

Check payable to order

Here, the "pay to the order of" line is filled in (and may or may not be crossed). The difference is that the payee indicated on the check can transfer the check amount to another person or company through endorsement.

This means that the beneficiary can sign the back of the check and indicate the name of the new beneficiary, who becomes the legitimate owner of the check.

To fill out this type of check, simply fill it out as normal.

Check made out to order

A check payable to a non-order person indicates that the payee on the check cannot transfer the amount of the check to another person or company by means of endorsement.

This means the check can only be deposited into the bank account of the beneficiary indicated on the check and cannot be transferred to another person. This provides even greater security.

To fill it out this way, cross out the phrase “pay to the order of” on the check and write, before the beneficiary’s name, the phrase “not to the order”.

Frequently asked questions

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