Types of Negotiable Instruments
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Transcript of Types of Negotiable Instruments
Types of Negotiable Instruments
Note
A promise to pay money.
Maker = Promises to pay money
Payee = Person maker promises to pay
Sample Note (simple)
Sample Note (detailed)
(continued)
Certificate of Deposit (CD)Special type of note:
1. Bank acknowledges receipt of money.
2. Bank promises to repay the money.
Draft
An order to pay money.
Drawer – Orders the payment of money
Drawee – Person to pay the money
Payee – Person entitled to the money
Sample Draft
Check
Special type of draft:
1. Bank is the drawee, and
2. Payable on demand.
Ordinary Check
Certified Check
Drawee (Lincoln) has accepted the check.
Cashier’s Check
Drawer and drawee are the same bank (Peoples Bank)
Teller’s Check
Drawer (Community Bank) and Drawee (Wells Fargo) are different banks.
Traveler’s CheckSign when purchase
Sign again when cash
Remotely Created Item