Check Facts

To cash checks at a branch other than your own, get a signature card. When you endorse a check (that is, sign your name on the back) it becomes as good as money and can be cashed by anyone who finds it. To prevent that, endorse it with instructions: “Pay to the order of Sarah May” or “For deposit only.” When accepting an endorsed check from someone else, ask him or her to write “pay to the order of (you)” so that if you lose it neither of you will be out the money.

Endorse checks on the back, at the left-hand end, in the first inch and half of space. If you signature is anywhere else, the bank may ask you to sign again. Most checks now carry a line to show where your signature goes.

Technically, a check may be good for years. But in practice, the bank might refuse any check that is more than one year old. That is if the bank notices.

If you write a check and wish you had not, call your bank and ask it to stop payment. Your account should be flagged right away, but you have to follow up with written authorization, usually by filing stop check form. The cost: $15, on average, but sometimes as much as $30. A stop payment lasts for a limited period of time but can be renewed. If the check slips through, the bank takes responsibility for it. The stop check form should spell out the rules.

You can arrange for regular, automatic transfers from your checking to your savings account. Interest earned on your certificates of deposit can be deposited into either account.

If someone forges your signature on a check and the bank cashes it, you are entitled to a 100 percent reimbursement. It does not matter that you failed to report that your checkbook was stolen (although you should have). It does not matter that you kept your checks with your credit cards, which carry your signature. In most cases, it is the bank’s absolute responsibility to guard against forgery. Some banks blame you and refuse to pay, in which case you should write directly to the bank’s president and to its state of a federal regulator.You have a responsibility, too. If you do not report a forgery within 14 days after the bank mailed your statement, and fraudulent checks continue to be cashed by the same person, the later losses are all yours.