When a check is bounced, it indicates there are insufficient funds in your current account (UK) or checking account (USA) to be able to pay the value the check has been written for. The bank then refuses to honor the check, which, in monetary parlance, is referred to as a "financial instrument".
A check is normally a piece of paper, that a person, referred to as the drawer, makes out a certain amount of money. This amount is payable only to the recipient, known as the drawee, and is made clear on the check, along with the date the check was written. Once the check is produced to the bank of the recipient, only then can the money be withdrawn from the drawer's account, providing there are sufficient funds in the account. This means that the drawer is not compelled to pay the drawee immediately, allowing for a time window to make sure the funds for the value of the check are available on the drawer's account.
With the debate surrounding the use of checks as a method of payment, it will not be long before bounced checks are a thing of the past. Even though checks, namely the form of providing a piece of paper that represents a certain amount of money, have been in circulation and use for a long time since the representation of money in paper or metal form became a viable form of payment, some countries have now removed checks as a form of payment, and only electronic or cash tangible methods of payment are only accepted.
A check is normally a piece of paper, that a person, referred to as the drawer, makes out a certain amount of money. This amount is payable only to the recipient, known as the drawee, and is made clear on the check, along with the date the check was written. Once the check is produced to the bank of the recipient, only then can the money be withdrawn from the drawer's account, providing there are sufficient funds in the account. This means that the drawer is not compelled to pay the drawee immediately, allowing for a time window to make sure the funds for the value of the check are available on the drawer's account.
With the debate surrounding the use of checks as a method of payment, it will not be long before bounced checks are a thing of the past. Even though checks, namely the form of providing a piece of paper that represents a certain amount of money, have been in circulation and use for a long time since the representation of money in paper or metal form became a viable form of payment, some countries have now removed checks as a form of payment, and only electronic or cash tangible methods of payment are only accepted.
