How do checks work? Your complete guide to writing & cashing checks

Checks might seem outdated, but people still use them to pay rent, bills, and other expenses. Even if you don't use checks often, you need to know how they work, since so many other people do. Whether you're receiving a check or writing one, here's what you need to know.

What is a check? 

A check is a piece of paper that tells your bank, “Please transfer (this amount of money) to (this person or company), here are my account details.” Checks are tied to your checking account, using your account and routing numbers to complete a payment. 

Here are some of the things people typically use checks for:

• Pay rent or utility bills

• Make large purchases where cash isn’t practical

• Send gifts or donations

• Pay friends or smaller businesses that don’t take cards or cash apps

• Make official or government-related payments

There are several types of checks, including personal checks, cashier’s checks, payroll checks, and certified checks. They all work similarly, but we’re focusing on personal checks, which are what individual people use most.

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How do checks work?

Checks enable the transfer of money from one person to another. Similar to apps like Venmo or Zelle, but with paper instead.

Here’s how it works:

• You (the payer) fill out the check (date, amount, payee, and signature). 

• You give or mail the check to the recipient.

• The recipient can then deposit the check into their account or cash it.

• The recipient’s bank uses the information on the check to withdraw money from your account.

Let’s say you just moved and need to pay your first month’s rent. You’d fill out the check with the landlord’s name, the date, and the amount. You’ll also need to sign the check. Once your landlord deposits the check, their bank processes it using your account number, routing number, and payment amount listed on the check. The money will then be withdrawn from your checking account, typically within a few business days after the check is deposited. 

Avoid fees and overdraft charges

Make sure you have enough money in your account to cover the check (and any other pending withdrawals). Otherwise, you could rack up fees and penalties from both sides! Your bank can charge you an overdraft fee, and the merchant might also charge a bounced check fee. That’s why it’s important to know how to balance a checkbook or your checking account.

Pros and cons of writing checks

There are several good reasons people still write checks.

Why people still use checks:

• They’re helpful for large payments, such as rent or tuition, where cash is impractical.

• Some landlords, government agencies, or small businesses don’t accept digital payments.

• You don’t need a phone, app, or the internet to use one.

• You can track payments by check number and memo.

Why people don’t love them:

• They’re slower to process than apps or cards.

• They can get lost, stolen, or altered.

• You have to keep track of your checkbook manually.

• Writing and mailing checks takes time (and stamps!).

How do you write a check?

How do checks work when you need to write one? You’ll fill in the date, who you’re paying, the amount (in numbers and words), and sign your name. There’s also a memo line for specific circumstances. Get step-by-step instructions on how to write a check.

How do you cash or deposit a check?

How do checks work if you’re the recipient? You’ll need to either cash it or deposit it. Here’s how it works:

• Sign the back of the check (aka, endorsing it).

• Use mobile deposit in your banking app, visit a bank branch, or find an ATM that accepts check deposits.

For more detailed instructions, see how to cash a check and where to cash a check.

Paper checks vs. digital tools

While checks are more old-fashioned, you may still need to write or deposit one occasionally. But it’s pretty simple once you know the check lingo. 

Day-to-day, most people use online banking or other digital tools where they can send, receive, save, or spend money without having to use checks or the mail. Digital wallets and transactions are incredibly convenient. 

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FAQs

Are paper checks still commonly used today?

Not as much as they used to be, but many people still use checks for rent, bills, and some official payments.

How long does it take for a check to clear and the money to be available?

Usually 1-3 business days, but it can take longer depending on the bank.

What's the difference between a personal check and a cashier's check?

A personal check uses your money and your signature. A cashier’s check is issued and signed by the bank, using the bank’s funds.