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The flashcards below were created by user
chanthalyxay
on FreezingBlue Flashcards.
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What are the different types of checks
- Cashiers
- Traveler's
- Certified Check
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Define Cashier's Check
A check drawn by a bank on itself and purchased by a customer
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Define Traveler's Check
- An instrument on which a financial institution is both the drawer and the drawee
- purchaser must prove his/her signature as a countersignature for a traveler's check to become a negotiable instrument
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Define Certified Check
- a check for which the drawee bank certifies in writing that it has set aside funds from the drawer's account to ensure payment of the check on presentation.
- on certification the drawer and all prior indorsers are completely discharged from liability on the check
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What is the banks duty to honor checks that are overdraft, posted dated, stale check, stop-payment order, death or incompetence of a customer, forged signature or alteration
- overdraft: the bank has the right to charge a customer for any items properly payable
- Postdated check: the bank may charge a postdated check against a customer's account, unless the customer notifies the bank of the postdating in time to allow the bank to act on the customer's notice before paying on the check
- Stale Check: the bank is not obligated to pay an uncertified check presented more than six months after its date, but the bank may do so in good faith without liability
- stop-payment order: the customer must make a stop-payment order in time for the bank to have a reasonable opportunity to act
- Death or incompetence of a customer: if the bank does not know of the death or incompetence of a customer, the bank can pay an item without liability
- Forged signature or alteration: The customer has a duty to examine account statements with reasonable care on receipt and to notify the bank promptly of any forged signatures or alteration
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What are the different types of electronic fund transfers
- atms
- point-of-sale systems
- direct deposits and withdrawals
- internet payment systems
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