Guide to Personal Checks
Although they get used less and less, checks are still a popular way to pay. According to the Federal Reserve Board, about 18 billion checks were written annually as recently as 2012. Some of those were paychecks, insurance benefits, and payments for benefits like Social Security – but many were personal checks.
What are Personal Checks?
Like all checks, personal checks are pieces of paper used to make payments.
You fill in information about who you want to pay, hand the check over, and your bank eventually sends money to the recipient’s account electronically.
Personal checks pay from personal accounts – they aren’t linked to businesses, governments, or other organizations. A personal account is an account for an individual or several individuals (like a married couple, for example).
Why it Matters
Checks can be used to pay for almost anything. As long as the recipient (or payee) agrees to accept a check, that’s all that matters. If you buy groceries, pay insurance premiums, or pay rent, a personal check is probably an acceptable form of payment.
Personal checks, however, are not always accepted. Because they draw from the account of an individual (as opposed to a government or business that presumably has more resources), they aren’t always acceptable. If the individual doesn’t have sufficient funds in her account, the check will bounce, and the payment will not go through.
For some transactions – especially large transactions like home purchases – a more trustworthy form of payment is required. Sellers want more assurance that they’ll get paid, so they might require bank wires, cashier’s checks, or money orders (but even those can be used fraudulently).
Likewise, if you receive a payment by personal check, it’s best to be sure the check is good before you spend that money (you should really ensure that every check is good – but it’s especially important with personal checks).
How to Spot a Personal Check
Personal checks are smaller than other types of checks and are generally written by hand, but larger computer-generated checks might still be personal checks. In the age of online bill payment, banks often print and send checks out from individual accounts, and those checks can carry the same risks as handwritten personal checks.
Another way to identify a personal check is to look at the account owner information: if you see an individual’s name, it’s a personal check.
Because they are riskier than government-issued checks, personal checks can be difficult to cash. The best way to cash one is to go to the bank where the check writer has an account (you’ll find bank information on the face of the check). That bank can see whether or not funds are available and update the account immediately.
You can also try cashing personal checks at your bank, but don’t be surprised if you can only get $200 or so. If your bank does give you more, it’s not because they know the check is good – they're just optimistic, but you’ll have to repay the bank if the check bounces.
Besides banks and credit unions, there are very few places that cash personal checks.
Some retailers and check cashing outfits might cash small checks. As of this writing, Kmart cashes personal checks up to $500.
If you write checks, you’ll eventually run out and need to get more. You can order more from your bank, order from a printer, or even print your own checks. For more details and suggestions for printers, see How to Get Checks.
Alternatives to Checks
There are numerous ways to pay for things and send money; checks are just one of them, and they might not be the best tool for the job. Electronic tools allow you to send funds securely (no potential for mail theft, and you don’t show your account number to whoever sees the check) and inexpensively. They also make it easy to track your payments – there’s no need to record every transaction in a check register by hand.
Instead of writing a check, try:
- Paying for purchases (online and in person) with a debit card
- Sending money to friends and family electronically
- Using your bank’s online bill payment system to make regular payments
The methods above can use the same money you’d use when you write a check – the funds come right out of your checking account.