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Simple English definitions for legal terms
check
Read a random definition: custodial account
A quick definition of check:
A check is a piece of paper that tells a bank to take money from one person's account and give it to another person's account. There are different kinds of checks, like ones that your boss gives you for working, or ones that you can buy from the bank to make sure the money is real.
A more thorough explanation:
A check is a written order that instructs a bank or financial institution to transfer funds from the account of the person who wrote the check (the payor) to the account of the person or organization named on the check (the payee).
There are different types of checks:
- Certified check: A check that has been guaranteed by the bank that the payor has enough funds to cover the amount of the check.
- Cashier's check: A check that is drawn on the bank's own funds rather than the payor's account.
- Paycheck: A check issued by an employer to an employee as payment for work done.
For example, if John wants to pay his rent, he can write a check to his landlord for the amount of the rent. The landlord can then deposit the check into their own account and receive the funds. In this case, John is the payor and his landlord is the payee.
Another example is when a company issues paychecks to its employees. The company writes a check for each employee's salary and the employee can deposit the check into their own account.