Crossed Check: Definition, Meaning, and How It Works

What Is a Crossed Check?

A crossed check is any check that is crossed with two parallel lines, either across the whole check or through the top left-hand corner of the check. This double-line notation signifies that the check may only be deposited directly into a bank account. Therefore, such checks cannot be immediately cashed by a bank or by any other credit institution.

Key Takeaways

  • A crossed check is a check that is crossed with two parallel lines, either through the top left-hand corner of the check or horizontally across the whole check.
  • Crossing a check provides specific instructions to a financial institution regarding how the funds can be handled.
  • Crossed checks are predominantly used in countries across Europe and Asia, as well as Mexico and Australia.

Understanding How a Crossed Check Works

Predominantly used in Mexico, Australia, and several European and Asian countries, crossed checks signal specific instructions to a financial institution regarding how the funds may be handled. Most commonly, crossed checks ensure that a bank strictly deposits the funds into an actual bank account.

Such recipient banks are forbidden from immediately cashing such checks upon initial receipt. This provides a level of security to the payer because it requires that the funds be handled through a collecting banker.

While the precise formatting may vary between nations, two parallel lines are the most frequently used symbols. These lines are sometimes paired with the words "& Co." or "not negotiable."

In rarer cases, the phrase "account payee" may also be written on the check, as an alternative method of conveying the aforementioned cashing instructions.

Crossed Check vs. Uncrossing a Check

Once a check is crossed, it's impossible for the payee to uncross it. Furthermore, such crossed checks are considered non-transferable, meaning they cannot be signed over to a third party. The only action permitted is for the payee to deposit the check in an account that the payee holds in their own name.

Although the payee cannot uncross checks, the payer can do so, by writing "Crossing Canceled" across the front of the check, but this activity is generally discouraged because it eliminates the protection the payer originally set in place.

Crossed checks are rarely used in the United States, and anyone attempting to deposit one is likely to encounter problems.

Special Considerations

Should a receiving bank fail to comply with the crossing, it can be deemed as a breach of contract between the institution and the customer who wrote the check. If the payee did not truly have the funds available to cover cashing the check, the bank may be held responsible for any associated losses.

An open check, which is also referred to as a bearer check, describes any check that is not crossed. Such checks may be cashed at the teller counter, with the funds being provided directly to the payee.