Negotiable Instruments again.The three primary functions of negotiable intruments are
- To serve as a substitute for money
- As a credit instrument
- As a recordkeeping device
Checks are three-party instruments. Drawer is the person writing the check, drawee is the bank, and payee is the person who will get the money.
Certified checks are checks which are drawn by a depositor and accepted by the bank from which the funds are drawn. Money is immediately removed from the drawer’s account to pay the amount on the check. Therefore, a certified check can’t bounce; it’s a promise by the bank that the funds in question exist and have been set aside to pay the check.
Need to Know:
- types of checks
- overdrafts
- stop payment orders
- forgeries/altered checks
- Electronic Funds Transfer Act
- credit/debit cards
- Midnight Rule