Types of checks in Chile: Characteristics and more

Learn throughout this article all about the different types of checkbook in Chile, its characteristics and all the details. Meet them!

Types of checks in Chile

Checks are practically obsolete financial instruments due to the rise of new forms of payment such as debit cards, credit cards and through digital platforms with the modality of transfers to third parties. However, it is a payment mechanism still used by individuals and companies.

In this order of ideas we will begin by explaining that a check is a financial document through which a person issues payment for some concept to a third party through a bank.

Logically, the amount of money must be available in the funds of the account holder, that is, the person who issues the check.

In Chile, the governing body of the banking sector is the Superintendence of Banks and Banking Institutions and determines that there are four types of checks in Chile. Next, we explain them to you with all their details.

Nominal check

This is one of the types of checks in Chile. It has certain characteristics that distinguish it, such as the following:

Features

It has the following characteristics:

This type of check should only be cashed at the bank only by the beneficiary, that is, the person to whom the check has been issued.
It shows crossed out the phrases “to the order of” and to the “carrier.”
It is not transferable to another person.
It can be deposited in the beneficiary's checking account.
It cannot be endorsed.

The procedure for cashing this type of check is now explained to you:

Cross-sign the check.
On the back of the check put your Rut and phone number
Go to the box office to collect cash or deposit it into your account.
If you wish to deposit it, you must place your account number on the back.

check to order

In this type of check the word "payable to order" must be placed, likewise it is essential to place the name of the beneficiary and cross out the word "bearer". However, this instrument can be endorsed in favor of a third party by the beneficiary and thus allow the placement of the check in a bank and make it effective as if it were the bearer.

Features

These checks have the following characteristics

The name of the beneficiary is printed on the check, as well as the expression "Pay to the order of".
It is important to present your identity card to the bank official in order to check the veracity of your identity.
This bank instrument is subject to being transferred to another person by endorsing it.
The check bears the expression "or bearer".

In order to cash this type of check at the bank, you must do what we detail below:

It must be signed in front crosswise.
Write your RUT and a phone number on the back.
It is possible to charge by box or, failing that, deposit in an account.
It is possible to deposit it, you should always write the account on the back and cross it to the front.
You can also deposit it into a third party checking account.

bearer check

Let's see next what are the characteristics of another of the types of checks in Chile, such as nominal ones.

Features

This type of check is exclusive to the beneficiary, whose name is reflected on the instrument, which is why it is non-transferable to a third party, with the exception of the same Bank in which the collection action is carried out: "value in collection" or in its default "to be deposited in my checking account". These expressions are placed on the back of the check.

How is a bearer check cashed?

To proceed with the collection of this type of check you must do the following:

It must be signed across the front.
Write your RUT and phone number on the back.
It can be collected through cash presentation or deposited in the beneficiary's account.
To deposit, write the account on the back and cross to the front.

crossed check

This is another of the types of checks in Chile, which represents being a very special instrument. Its main purpose is to avoid any type of fraud against the account owner's assets by preventing it from being collected in cash at the bank's cash desk. Its purpose is the possibility that it be deposited in another current account, two parallel lines are drawn on the check and crosswise.

It is important to note that other checks such as Bearer, Nominative and Order can be crossed. An important warning for users is that the Law on Bank Current Accounts and Checks expressly prohibits the bearer of the same from making alterations or erasing the transverse lines of the crossed check. Do you want to know more about finances? I invite you to read this interesting article financial culture

Features

The main characteristics of Types of check in Chile, crossed check are the following:

It is a check that has two transverse and parallel lines drawn on its front.
This check can only be deposited into a checking account.
It can be endorsed to another beneficiary who has a checking account or wants to endorse it.
Both checks to order, bearer checks and nominative checks can be crossed.
The "crossed" condition of a check cannot be eliminated, since the Law on Bank Current Accounts and Checks expressly prohibits the bearer from erasing or altering the cross lines and indications of the crossed check.

More details about checks

With what was stated in previous paragraphs, we let you know the types of checks in Chile. Below we will explain considerations of interest that you should know about checks.

Terms of validity

We must all be very attentive to the data that must appear on a check for it to be valid

It is essential to place the data on a check in a clear and precise way, which does not create doubts or inaccuracies that could compromise its validity.

It is vitally important to be extremely careful in the following aspects:

When a check is endorsed: the phrase for deposits only should be noted in the upper corner of the other side of the check, along with the account number.
Checks currently have a space on the back specially designed to place the name, surname and address. It is very important for the user to fill out this format legibly and in black or blue ink.
Next, there is the part where the date is placed: day, month and the year of issuance of the check.
In the third part you have to enter the name of the person or company to whom this document will be delivered (if you are going to make a cash withdrawal, you will have to write the word cash).
You will need a space to write down the amount of money
There is also space for you to write the same amount in letters
There is a space for you to write the name of the bank where you have the bank account.
Place the item you bought in the corresponding space as a reminder. (Some banks call this space a memo.)
There is a line for you to affix your signature and the bank's authorization to deliver the check
Here the number of the check is written down, so that you can keep track of how many checks you have issued, placing the date, the amount, as well as the beneficiary to whom you will deliver this type of payment.
You must also write your account number, which consists of 10 numbers, so that the bank can be informed of where the money comes from.
Now you will write the number of the interbank transit, which allows the bank that issued the check to be known, with this number it is allowed to make a direct deposit and thanks to this operation it makes it easier for the Department of Defense to make the electronic deposit of your salary check directly into your account, instead of depositing a paper check.

As you can see, there are many details that you must take into account when issuing a check, try not to damage them because most banks charge commissions charged to your account for issuing the checkbook.

Security

This aspect is of vital importance and you should be aware of some security considerations.

In this sense, one of the most important considerations is that related to security conditions; remember that checks are financial instruments that allow the mobility of different transactions between two subjects clearly defined by law and custom.

You also know that checks are a mechanism for exchanging various sums of money intended to satisfy needs and obligations, such as the payment of salaries, payment of goods, cancellation of services and others.

The Superintendence of Banks and Financial Institutions of Chile has changed the formats of checks allowing more information in a precise way, without putting at risk the security of users and entities involved in this type of transaction.

The new design of the check format has a great advantage and is that it facilitates reading through electronic means in order to verify the signature and other data of interest efficiently and quickly.

Checks have also undergone changes in form, such as the addition of new fields such as amount and date.

Banking entities have taken the quality of the paper very seriously, using a special ink in order to perfect the authenticity of the document.

The change of check format generates a series of costs for the banking entity, but these are transferred to the client as the end user of the value chain. The crossed check system continues to be maintained, which contains in its nature a series of characteristics exposed throughout this article that give it greater reliability, precise information and security.

Advantages

The advantages of checks have been reduced, precisely because of their replacement or new forms of ago.

We point out the most significant ones:

The issuance of a check is done at the time and situation that the owner deems so.
It issues you the fact of not having amounts of cash.
You have the power to decide in which bank you deposit the check.

Endorsement

You may have wondered what it means to endorse a check. Here we give you the answer. Endorsing a check means that the beneficiary of the same puts the name of another person on the check, who will then be the person who will cash or deposit that check in his account.

Now, we invite you to observe the following audiovisual in order to reinforce and expand explained in this article.