Explanation of the difference between different types of exams


Debit cards and mobile payment options might be all the rage these days, but in some corners of the banking world, good old-fashioned checks still reign supreme. And there’s a surprisingly wide range of options. You have your standard bank checks, your travelers checks, your certified checks – and almost a dozen other types.

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GOBankingRates spoke to Jessica Chase, a credit and finance expert Premier Title Loanto learn more about each type of exam (there are 14 categories) and their purposes. We also briefly explored what the future of checks might look like in an age increasingly committed to the paperless convenience of digital.

1. bank checks: A bank draft is the simplest form of check and we call it the traditional cheque. They are underwritten and guaranteed from the bank’s own funds and signed by its teller. The person signing the check can cash it to a third party and withdraw funds on their own behalf.

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2. payslips: These checks are paychecks given by an employer to their employee for services rendered. They are usually drawn into a company’s checking account.

3. E-Checks or Electronic Checks: E-checks are the digital versions of a simple bank draft. They go through an automated clearinghouse to transfer funds from one account to another.

4. Travelers Cheques: This check is always for a certain amount and serves as an alternative to cash. As the name suggests, travelers use it to buy goods when they don’t have cash with them. They can be exchanged for local currency at most banks.

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5. Personal checks: Personal checks are drawn against an account holder’s own funds. The account holder enters the payee information and the check is not authorized until it is presented to the bank.

6. Payment Instructions: Money orders are very similar to regular checks, but the difference is that they are guaranteed by the bank and cannot be bounced.

7. Certified Checks: A certified check is a type of check where the bank guarantees that the amount issued will be available in the drawer’s account, hence the term “certified”.

8. Cashier’s Checks: A bank check is also guaranteed by the bank’s own funds, but with the difference that they are much more secure and banks charge a higher fee for them.

9. Trade Exams: Commercial checks are like personal checks but for businesses and organizations. They are issued to a company’s account and used to pay their suppliers, vendors, etc.

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10 business checks: A business check is any check drawn on a company’s checking account. For example, a paycheck is also a business check.

11. Government Controls: Any check made out to you by the government will be considered a government check. They usually cover grants, grants and tax refunds.

12. Tax Refund Audits: This is exactly what the title suggests. Taxpayers who receive a refund of their tax payments at the end of the tax year. The check they receive from the government is called a tax refund check.

13. Insurance Checks: When individuals file a claim for damages or coverage with their insurance company, if approved, they receive a check for a dollar value of their claim. This test is called the insurance test.

14. Out of State Controls: A foreign check is a check drawn in a country other than that in which it is deposited or cashed.

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So many controls today, but will it always be like this?

With consumer demand for seamless technology ever increasing, it’s worth asking: will this diverse assortment of checks remain relevant or will they be phased out? Most likely, the checks will say goodbye in time, but we’re still a long way from that.

“Because of its popularity with older people and organizations, banks will keep the screening system unchanged for the next decade,” Chase said. “With the introduction of new payment systems by fintech, the banking industry is being revolutionized. But banks are still reluctant to adopt these technologies because of their tendency to avoid risk. But if they do, there is a high probability that the current control system will be overturned or replaced entirely.”

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About the author

Nicole Spector is a writer, editor and writer based in Los Angeles and Brooklyn. Her work has appeared in Vogue, The Atlantic, Vice and The New Yorker. She writes regularly for NBC News and Publishers Weekly. Her 2013 debut novel, Fifty Shades of Dorian Gray received rave blurbs from the likes of Fred Armisen and Ken Kalfus and was published in the US, UK, France and Russia – although no one knows what happened to the Russian edition! She has an affinity for Twitter.

Kenneth T. Shippee