Is there any limit to the size of a cheque?

[Sunspace]

I'm pondering* buying a car. Now, supposing I had all the required money (let's say, $35000) in my bank account, could I just write a normal cheque to pay for the car? How about a paying for a house?

I'm aware that the bank places limits on the amount of money I may withdraw by debit card or at the money machine, but that's more related to the amount of money I typically have on hand.

Is there any size limit applied to the cheque process in general?

*Fantasizing about, actually. In real life, I won't be buying a car for a long, long time.

[RealityChuck]

Not really. As long as you have the money in your account, you can write a check for any amount you have.

Now with a really big check, the bank would most likely check to see you have the funds before depositing it, and may prefer to have a personal check certified.

[spingears]

A fantasy question deserves a fantasy answer!
Just go ahead and write it out now and go to the car dealer and drive it out!

To be realistic:

As long as you have the funds on deposit and the recipient will accept a person check in that amount there is no impediment to doing so. The dealer will undoubtedly call the bank to verify that furnds are available while busying you with other matters.

If you were to withdraw the funds, close the account, or some other foolish ploy to defraud the dealer they would take legal steps to recover any loss.

[bibliophage]

Generally when buying real estate with a check, the seller will want a cashier's check or something similar rather than a personal check. There's no legal reason the seller couldn't accept a personal check if he wanted to.

As for absolute limits on the value of checks, I vaguely recall a case from the mid- to late-1980s when a very large lawsuit award had to be made with two payments. I don't remember if it was two checks or two electronic transfers. I believe this was due to a technical limit on the size of one payment, rather than a legal limit. If memory serves, it was a lawsuit award involving two oil companies. I don't know if the technical limit is the same as it used to be.

[sevenwood]

Is there any size limit applied to the cheque process in general? Basically, if they'll take it you can write it.

As a practical matter, you'll find that car dealerships are very accomodating when you're purchasing a new car. They really want to sell you a car, they don't want you walking off the lot without buying one, and as long as they're reasonably sure that you're on the up-and-up they'll take your check and take the risk that it might bounce and that you'll have to make good on it another way.

I've bought new cars and paid the dealer by writing a check for the full amount, and they've never complained.

In fact, I've even been in situations where I didn't have the cash in the checking account yet (I had to move it there from another account and the two weren't connected ATM-wise) and told the dealer that we'd have to wait a couple of days before completing the transaction and they told me that they'd just sell me the car right now and hold onto the check for a couple of days before cashing it.

Like I said, they really don't want you walking off that lot without purchasing one of their cars...

[Exapno Mapcase]

In the days before electronic transfers, governments and large corporations routinely conducted business through the use of large checks. Governments still do, for that matter. (Yes, physical checks sent through the U.S. mail, up in the millions of dollars.) I wouldn't be surprised to hear of a billion-dollar check, although I can’t cite one.

But this one ain't hay:

Kroc's giving legacy touches San Diego (http://www.signonsandiego.com/news/metro/rowe/20031225-9999_1c25rowe.html)

Since that day, Oct. 12, six organizations have issued their own press releases to acknowledge gifts from Kroc's estate. The largest check, $200 million, was written to National Public Radio. The smallest, $5 million, went to NPR's local affiliate, KPBS.

[Northern Piper]

As for absolute limits on the value of checks, I vaguely recall a case from the mid- to late-1980s when a very large lawsuit award had to be made with two payments. I don't remember if it was two checks or two electronic transfers. I believe this was due to a technical limit on the size of one payment, rather than a legal limit. If memory serves, it was a lawsuit award involving two oil companies. I don't know if the technical limit is the same as it used to be.You're probably thinking of the Penzoil v. Texaco litigation back in the mid-eighties, where a Texas jury awarded $13 billion (yes, with a "b"!) to Penzoil. I don't know how much they eventually settled the case for, but I imagine a pretty large amount.

[FilmGeek]

My father wrote a check for something like $27,000 or so when the insurance money came in after his auto accident and paid for the new car.

Actually, my father started the check and my mother finished it after he handed her the checkbook and said "I can't spell that high".

[kunilou]

I suppose there might be a limit on how many places the bank's system can hold, so that the software for personal checks might accept $999,999,999.99 but kick out a check for one cent more.

[friedo]

Here's a related question: How do you deposit one of those giant cardboard checks that they give people who win contests?

I don't think they'd fit in an ATM envelope.

[gotpasswords]

You're probably thinking of the Penzoil v. Texaco litigation back in the mid-eighties, where a Texas jury awarded $13 billion (yes, with a "b"!) to Penzoil. I don't know how much they eventually settled the case for, but I imagine a pretty large amount.

Our Fedwire wire transfer system has an upper limit of $9,999,999,999.99, so a $13bn payment would need to be split. For $10bn, they may do it in one wire and tape a penny to a postcard and mail it. :D

[stuyguy]

I think a far more interesting aspect of this "huge-dollar-amount check" hypothetical scenario is being ignored: What does the recipient's bank do when it gets this huge check?

I mean, how do they know it's on the up-and-up even if the recipient agreed to take it and the check-writer has sufficient funds to cover it? Surely they can't trust a million dollar check based on a signature match, or can they? Or does, say, Donald Trump get a phone call from the recipient's bank (or his own bank?) asking if it's legit? Seems to me there have got to be some safeguards downstream of the writer-recipient transaction that no one has mentioned yet. Anyone?

[np_complete]

I believe that any cheque for over $1,000,000 must be in the form of a giant novelty check, as this helps prevent fraud. :D

[kezami]

Here's a related question: How do you deposit one of those giant cardboard checks that they give people who win contests?

I don't think they'd fit in an ATM envelope.


Those large cardboard cheques (sorry, I'm Canadian) are just for publicity and are not legally binding.

[kezami]

Why'd I say sorry? :rolleyes:

[Jake4]

Why'd I say sorry? :rolleyes:Because you have Canadian Guilt. You know the correct spelling of certain words, you just choose to ignore it.

;)

[SandyHook]

Going back to the, "buying a car and just writing a check" thing by sunspace

We did that last year and what RealityChuck said about having the money in the bank is necessarily true. When we left the dealer asked us if we wanted him to hold the check for a day or two. I must say there was a surge of pride at the look of respect in his face when we told him, "Oh, no, no. Take care of it today." As far as I know they never checked anything.






Of course they did have our fingerprints, copies of drivers licenses, credit report going back upteen years, and proof that we had owned a house in town for 6 years. Guess they figured they had us by the balls, except of course for Ms Hook who is notibly ballless.

[Caught@Work]

When I worked in IT in banking (16 years ago now), the field size of the transaction amount was S9(11)V99 or $99,999,999,999.99

We did up it to S9(13)V99 a few years before I left so $9,999,999,999,999.99 was the maximum amount that our system could process.

Prior to that I worked in branches and as far as I can recall, there was never a restriction on the value of a cheque that could be presented.

Of course, when million dollar cheques did arrive, we made darn sure the signatures matched.

[Slartibartfastt]

I work in the livestock industry and writing checks that are larger than most normal people do is not uncommon. For example, buying 500 head of cattle with a value of $600 a head means I have to write a check for $300,000. In almost all cases I have either done past business with the seller and/or I have a line of credit established with the seller. Also in most cases I don't have the funds in the checking account when I write the check but I do let my banker know ahead of time that I am going to be buying some cattle and have filled out the paperwork on a loan. Then all I have to do is call the bank and they will put enough money in the account to cover the check. They also want me to stop in within a few days so they can get copies of the bill of sale and etc.

I also farm and that can involve some big checks also, but the biggest ones are for livestock.

[HeyHomie]

Here's a related question: How do you deposit one of those giant cardboard checks that they give people who win contests?

I don't think they'd fit in an ATM envelope.

I asked David Feldman (of Imponderables - Hey, this was before I'd heard of the SDMB!) about his and he said that you could, theoretically, take such a check into your bank and they'd have to deposit it. BUT, those checks are just for show and the recipient is actually given a "real" check after the photo ops are over.

BTW, remember that scene in Happy Gilmore when he complained that he wanted a giant check like the first place winners get, even if he came in last? A later scene shows the back seat of his car filled with huge cardboard checks.

[HeyHomie]

For example, buying 500 head of cattle with a value of $600 a head means I have to write a check for $300,000.


Interesting.

In a transaction like that, do you just use your run-of-the-mill checkbook like you use to pay for your groceries, or do you have a special checkbook with (physically) larger checks, with room for more numbers?

[Slartibartfastt]

Interesting.

In a transaction like that, do you just use your run-of-the-mill checkbook like you use to pay for your groceries, or do you have a special checkbook with (physically) larger checks, with room for more numbers?

I use a normal sized checkbook, its the same size as the one I use for day-to day things, but it is a seperate account because of tax and bookeeping issues.

[Ringo]

As long as we're in the post question answered drivel:

Just to add a note to what SandyHook related: a year ago I wrote a check to a car dealer for the full price of the car I was buying and they didn't even deposit it for a couple of weeks.

From HeyHomie:
In a transaction like that, do you just use your run-of-the-mill checkbook like you use to pay for your groceries, or do you have a special checkbook with (physically) larger checks, with room for more numbers?

The single biggest check I've ever personally written was for a bit less than two hondred thousand in the days before us mere mortals had software to print them out. When somebody who's used to writing checks for fifty-six and 32/100s has to write a check for one hundred ninety-eight thousand eight hundred and sixty-eight and 64/100s they're liable to be squnching things up towards the end.

[Sunspace]

Cool! It looks like I'm all set except that I have to get the money. :)

Another question.

Can I write the amount-in-words in, say, German, and have it go through an English-speaking bank? If I'm in Germany, can I write the amount in English?

Sunspace scratches his head and is amazed that it never occurred to him that people might write cheques in French in Canada...

[suezeekay]

If you write a very large check you need to look at your checking account agreement and see how much notice the bank requires to cash the check. In the case of a car dealer where it's just a matter of moving some electronic blips, it doesn't matter, but in the case, say of a check to someone interested in cash (for some interesting reason), the bank is only required to keep so much cash on hand, I think 5% of deposits, so they might not be able to cover it without notice.