Book Opener

Cashier’s ChecksA cashier’s check is a check drawn by a bank upon itself. It issimilar to a certified check. However, the bank issues a cashier’s check,and payment on it cannot be stopped. Either the bank transfers the amountof the check from the depositor’s account to its own, or the depositorwrites a check to the bank for that amount. With the money in its control,the bank then issues a check for the amount. No matter where acashier’s check is sent by the bank or by a customer who purchases itfrom a bank, it must be returned to that bank for final payment. Peoplewho will not accept personal checks will often accept cashier’s checks.Bank DraftsA bank draft , sometimes called a teller’s check or treasurer’scheck, is a check drawn by a bank against funds the bank has on depositwith another bank. People will often take a bank draft when they willnot take someone’s personal check because they have faith that a bankwill honor its own check.Money OrdersA money order is a type of draft that substitutes for a check andmay be purchased for a fee from banks, post offices, stores, traveloffices, and automobile clubs. Instead of being drawn on an individual’saccount, a money order is drawn on the funds of the organizationthat issues it.When purchasing a money order, you fill in your name and addressand the name of the payee on the instrument and then receive a receiptfor the money order. If the money order is lost and you have the receipt,it will be replaced if it has not already been cashed. Postal Money Orderscan be purchased for amounts up to $1,000.U.S. International Postal Money Orders are often used to send moneyto foreign countries. Telegraphic money orders can be used to sendmoney quickly. Under the UCC, a bank money order is a check, eventhough it is described on its face as a money order. Money orders arenot as freely negotiable as other instruments because they may be transferredonly once.Traveler’s ChecksIndividuals who travelto foreign countriessometimes usetraveler’s checks, whichcan be purchased at avariety of locations invarious currencies.Travelers can easilyget refunds if theirtraveler’s checks arelost or stolen. Whatare some otheradvantages ofpurchasing traveler’schecks?Get involvedLearn about differentcurrencies such as thepound, yen, and theEuro. Investigatepossible careers thatinvolve internationaltravel.Traveler’s ChecksA traveler’s check is similar to a cashier’s check in that the issuingfinancial institution is both the drawer and the drawee. As with moneyorders, the buyers pay the full amount of the checks, plus a service fee.You are required to sign traveler’s checks in the presence of the issuerwhen they are purchased. To cash a check, you write the name of thepayee in the space provided and countersign it in the payee’s presence.Only the purchaser can negotiate traveler’s checks, and the issuing bankeasily replaces them if they are stolen.Chapter 24: Writing Checks 531