Certified Cheque

A certified check or certified cheque is a form of cheque for which the bank verifies that sufficient funds exist in the account to cover the cheque, and so certifies, at the time the cheque is written. Those funds are then set aside in the bank's internal account until the cheque is cashed or returned by the payee. Thus, a certified cheque cannot be stopped (can't "bounce"), and, in this manner, its liquidity is similar to cash, barring bank failure or illegal act (such as the funds being based on a fraudulent loan, at which point the cheque will be disavowed).

In some countries, e.g. Germany, it is illegal for a regular bank to certify checks.[1] This regulation is supposed to prevent certified cheques from becoming a universal substitute for cash, which is considered the only legal tender. The Deutsche Bundesbank (Federal Bank) is the only financial institution authorized to issue certified checks.

Because of the liquidity and certainty of payment of a certified cheque, it is sometimes considered equivalent to cash, such as in the regulation of credit for casino gaming in Macau, where the law explicitly states that if a casino patron obtains casino chips and pays with a certified cheque, the transaction is not regarded as credit for gaming (see Law 5/2004, art. 2).

It is possible to counterfeit or forge a certified cheque, in which case it is not binding on the bank and is worthless; see cashier's check for an exploration of associated risks.

See also

References

External links



  This article uses material from the Wikipedia page available here. It is released under the Creative Commons Attribution-Share-Alike License 3.0.

Certified_cheque
 



 

Connect with defaultLogic
What We've Done
Led Digital Marketing Efforts of Top 500 e-Retailers.
Worked with Top Brands at Leading Agencies.
Successfully Managed Over $50 million in Digital Ad Spend.
Developed Strategies and Processes that Enabled Brands to Grow During an Economic Downturn.
Taught Advanced Internet Marketing Strategies at the graduate level.


Manage research, learning and skills at defaultlogic.com. Create an account using LinkedIn to manage and organize your omni-channel knowledge. defaultlogic.com is like a shopping cart for information -- helping you to save, discuss and share.


  Contact Us