FLOATING CHECK Meaning and
Definition
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A floating check, also known as a post-dated check or an undated check, is a financial instrument issued by an individual or a company that bears a future date instead of the current date. In essence, it is a check that is written and signed on a given day but contains a date that is later than the day it is created. The purpose of a floating check is to delay its presentation for payment until a specific date in the future.
Floating checks are generally used for various reasons, such as making payments for outstanding debts, purchasing goods or services, or simply to reserve funds for a future transaction. By post-dating a check, the issuer ensures that the recipient does not attempt to deposit or cash it until the agreed-upon date. This provides the issuer with some control over the timing of when the funds will be withdrawn from their bank account.
However, it is important to note that the legitimacy of floating checks may vary depending on regional legislation and banking regulations. While they are generally accepted, some financial institutions or individuals may choose not to honor them if they have specific policies or concerns related to potential payment irregularities.
Overall, a floating check is a form of financial instrument that allows the issuer to postpone the withdrawal of funds from their bank account until a specified future date.
Common Misspellings for FLOATING CHECK
- dloating check
- cloating check
- vloating check
- gloating check
- tloating check
- rloating check
- fkoating check
- fpoating check
- fooating check
- fliating check
- flkating check
- fllating check
- flpating check
- fl0ating check
- fl9ating check
- flozting check
- flosting check
- flowting check
- floqting check
- floaring check
Etymology of FLOATING CHECK
The term floating check does not have a specific etymology since it is not a widely recognized or standardized term in relation to checks. It seems to be a phrase used colloquially to describe a practice where someone intentionally writes a check without having sufficient funds in their account, relying on the time delay between when the check is written and when it is deposited and cleared by the bank. This delays the funds being withdrawn from the account, allowing the person to benefit from a temporary float period. However, this practice is generally considered fraudulent and illegal in many jurisdictions, known as check kiting or check fraud.
