What is an 'Outstanding Check'

An outstanding check is a financial instrument that draws on the funds in an individual's or business' bank account but which has not yet been cashed or deposited by the payee. An outstanding check represents a liability for the payor. The payor must be sure to keep enough money in the account to cover the amount of the outstanding check until it is cashed, which could take weeks or even months.

BREAKING DOWN 'Outstanding Check'

Forgotten outstanding checks are a common source of bank overdrafts. One way to avoid this occurrence is to maintain a balanced checkbook. With banking activity becoming increasingly electronic, another way to avoid writing a check and forgetting about it is to use the checking account's online bill pay service, which should provide real-time information about the total dollar amount of checks outstanding and the total dollar balance presently in the account.

RELATED TERMS
  1. Check

    A written, dated and signed instrument that contains an unconditional ...
  2. Crossed Check

    Any check that is crossed with two parallel lines, either across ...
  3. Noncash Item

    1. A check or other negotiable item, such as a draft, deposited ...
  4. Bounced Check

    A slang word for a check that cannot be processed because the ...
  5. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  6. Canceled Check

    A check that has cleared the depositor's account and has been ...
Related Articles
  1. Personal Finance

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  2. Personal Finance

    Top 5 Reasons Banks Won't Cash Your Check

    Learn the top reasons that a bank won't cash your check, and find out what steps you can take to prevent those scenarios from happening.
  3. Managing Wealth

    2015's Top Checking Account Promotions

    Open a checking account in 2015 and the bank could give you a cash bonus. Check out these top offers.
  4. Personal Finance

    What is a Bounced Check?

    Bounced check is a slang term to describe a check that cannot be processed because its writer has insufficient funds.
  5. Investing

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  6. Personal Finance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  7. Investing

    Types Of Shares: Authorized, Outstanding, Float And Restricted Shares

    A company’s financial statements may refer to multiple types of stock, including authorized, outstanding, float and restricted shares. If a company issues more shares, its outstanding shares ...
  8. Personal Finance

    Overdrafting

    An overdraft occurs when money is withdrawn from a bank account in an amount that exceeds the funds available in the account. Banks often permit this as a form of short-term loan to the account ...
  9. Managing Wealth

    Top Premium Checking Accounts of 2015

    Which banks offer the best deals for premium checking accounts – and what do you have to do to qualify for one?
  10. Investing

    The Best Small Business Checking Accounts in 2016

    Accounts with big banks offer frills, such as mobile and text-based banking – but for small businesses, local banks and credit unions can save money.
RELATED FAQS
  1. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  2. How long does it take a check to clear?

    It usually takes two days for a check to clear, but in some cases it may take longer. Discover how banks treat large deposits ... Read Answer >>
  3. What is the weighted average of outstanding shares? How is it calculated?

    The amount of shares outstanding in a company will often change due to a company issuing new shares, repurchasing and retiring ... Read Answer >>
  4. Can a checking account go negative?

    Find out about negative checking account balances and the ramifications. There is a price to pay, but smart consumers can ... Read Answer >>
  5. What is the difference between weighted average shares outstanding and basic weighted ...

    Outstanding shares refers to stock that is currently held by investors, including shares held by the public, and restricted ... Read Answer >>
Trading Center