Updated: June 12, 2024
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A cashier's check, also known as an official bank check, is a secure form of payment guaranteed by the bank or credit union that issues it. They are often required for large transactions or when the recipient needs assurance that the funds are legitimate and available.
This type of check offers more security than a personal check and reduces the risk of fraud or insufficient funds.
Cashier’s checks guarantee that funds are available for payment since the amount is first withdrawn from your account and deposited into the bank’s account.
Cashier’s checks are a secure way to make large payments, such as when buying a home or vehicle.
Cashier's checks are more secure and better for large payments in comparison to other methods.
When requesting a cashier's check, you'll pay the financial institution that will issue it before they prepare the check. You can pay by depositing cash with the bank or authorizing a withdrawal from your checking or savings account.
The bank will first verify that your account has sufficient funds available to cover the amount of the cashier's check you are purchasing. Once the funds are confirmed, the bank prepares the check with your requested payment details. The cashier's check is drawn directly from the bank's account rather than your funds, with the bank acting as the guarantor.
Cashier's checks often have extra security measures like watermarks or other special markings that help protect against fraud.
Cashier's checks are ideal for significant purchases or transactions where cash is impractical or risky. For example, when buying a house, the seller will likely require a cashier's check for the down payment to ensure the funds are secured, legitimate and accessible.
Other common uses include:
In these situations, a cashier's check provides peace of mind for both the buyer and the recipient.
The buyer knows the funds will be available, while the recipient is assured the check will clear without issues.
Banks generally handle cashier's checks the same way, regardless of the amount. But for larger amounts, banks typically take additional steps to verify the authenticity of the check. For very large cashier's checks, the bank may require more documentation like proof of the transaction purpose. Banks may also place temporary holds or use extra security features like watermarks. Under the Bank Secrecy Act, banks are required to report transactions over $10,000 to the federal government, which includes the issuance of cashier's checks.
Cashier's checks offer advantages over other payment methods but have potential drawbacks.
Guaranteed Funds
Since the check is drawn from the bank's account, the recipient can be confident the full amount will be available.
Enhanced Security
Cashier's checks have watermarks or signatures from bank employees and other fraud prevention features to protect against counterfeiting.
Fast Clearing
Since payment is pre-authorized, funds from a cashier's check are typically made available to the recipient faster than funds from a personal check.
Widespread Acceptance
Due to the higher security they provide, cashier's checks are accepted for many large transactions where personal checks may not be.
Fees
Banks typically charge a fee (often $5-$10) to issue a cashier's check, adding to the overall cost.
Non-Refundable
Once issued, a cashier's check typically cannot be canceled or refunded if the transaction falls through.
Not Completely Fraud-Proof
While more secure than personal checks, skilled counterfeiters can still alter a cashier's check.
Inconvenient Process
You may need to visit a bank branch during business hours to get a cashier's check.
Payment Limits
Many banks cap the maximum amount for a single cashier's check, which could require obtaining multiple checks.
Cashier's checks offer enhanced security but aren't the only secure payment option for large sums of money.
Both cashier's checks and money orders provide a secure way to make payments without using cash. Still, there are some critical differences between the two.
A bank or credit union issues a cashier's check, while a money order can be purchased from the U.S. Postal Service, grocery stores, retailers and other vendors. Money orders typically have lower maximum limits, often $1,000 or less, whereas cashier's check limits tend to be much higher–often over $10,000.
Fees for money orders are usually just a few dollars, while cashier's check fees from banks can be $5-$10 or more. Money orders are paid for with cash upfront, whereas cashier's checks are drawn directly from your bank account funds.
Feature | Cashier’s Check | Money Order |
|---|---|---|
Issued by | Banks and credit unions | USPS and retailers |
Maximum amount | Often $5,000+ | Usually $1,000 or less |
Cost | $5-$10+ | Often $5 or less |
Where funds are drawn | Your bank account | Cash upfront |
Ideal for | Large purchases, investments | Smaller transactions |
Banks issue both cashier's checks and certified checks, but each works differently. A cashier's check is signed by the bank and drawn from the bank's own funds, while a certified check starts as a personal check that the bank certifies and guarantees with a special stamp and signature.
With a cashier's check, the bank transfers the full amount from your account to their own before issuing the check, thereby guaranteeing the funds. Certified checks are also guaranteed, but the money is deducted from your account right away when the check is certified.
Cashier's checks tend to be more expensive, with fees around $5-$15, while certified check fees are usually $10-$15. The check amount is also withdrawn from your account immediately.
Cashier's checks are better for large payments, while certified checks work for moderately sized secure transactions.
Feature | Cashier’s Check | Certified Check |
|---|---|---|
How it works | Bank transfers funds from your account to their account | Bank certifies your personal check is legitimate |
Account listed on check | Bank's account | Your personal account |
Guaranteed by | Bank | Bank |
Cost | $5-$15 fee | $10-$15 fee + check amount deducted upfront |
Ideal for | Large purchases, investments and secure payments | Moderate transactions requiring bank guarantee |
You can obtain a cashier's check from virtually any bank or credit union, either in person at a local branch or sometimes through online banking.
Many financial institutions require you to be an existing customer with an account to purchase cashier's checks. If you don't have a bank account, your options for getting a cashier's check are more limited, but getting one is still possible. You should check with a bank's policies, as banks will have stricter ID requirements for issuing cashier's checks to those without accounts. You'll also need to have cash on hand to cover the check amount plus any fees.
Obtaining a cashier's check is straightforward, though you may need to visit a local branch to get one.
You'll need the full amount you want the cashier's check made out for and a valid ID.
Visit your local branch and request a cashier's check from a bank teller. If your bank allows it, you can order one through online banking.
In addition to the cashier's check amount, you'll need to pay the bank fee, typically $5-$15.
Get a receipt as proof of purchase in case any issues arise with the cashier's check later.
Cashier's checks offer enhanced security, but they can still be targets for fraud, which could lead to financial losses. If you unknowingly accept a fraudulent cashier's check, you could face fees, as the bank will likely reverse the deposit once it determines the check is fraudulent.
You could also face legal issues if the check was used in a scam and you forwarded the funds. You may not be held liable if you can prove that you were an innocent party. It's a good idea to consult with a legal professional if you find yourself in this situation. Some common cashier's check scams include:
Check Processing Job Scams: In these scams, you might be asked to be a middleman or "check processor." You receive payment via cashier's check and are expected to deposit the money in your own account, keep a small amount and then forward the rest to someone else.
Mystery Shopper Scams: You receive a cashier's check after being selected to mystery shop for someone. You may be asked to use some of the funds to buy products, keep some of the funds for yourself and send another portion to a third party via a wire service — but the check turns out to be fraudulent, so you lose all the money transferred and spent on items.
Overpayment Scams: Someone overpays with a cashier's check for an item/service you're selling and asks you to wire back the excess amount.
Cashier's check scams can be sophisticated. Here are some tips to help you avoid them:
Don't accept a cashier's check for more than you're owed and refuse requests to wire money back.
MoneyGeek compiled answers to some frequently asked questions about cashier's checks.
The cost of a cashier's check typically ranges from $5 to $15, depending on the bank or credit union issuing it. Some banks charge a flat fee, while others base it on a percentage of the check amount.
There is generally no set maximum limit. The amount of a cashier's check can be as high as the available balance in your bank account, whether a checking or savings account.
Cashier's checks technically don't expire. Some cashier's checks have a "void after X days" disclaimer, usually between 60 to 180 days, while others do not expire as long as the bank doesn't fail.
You can get a cashier’s check from a bank or credit union you have an account with, and some financial institutions offer this service to non-customers.
Technically, you can cancel a cashier’s check. Still, the process can be complex and may require an indemnity bond, which is an insurance policy for the bank’s funds behind the check. The bank may also charge a cancellation fee.
A cashier's check looks similar to other types of checks. It should have a line listing the payee's name and one for the amount.
You should see the words "Cashier's Check" printed at the top of the check. It displays the bank's name, date, payee and amount and typically has enhanced security features like watermarks.
If you go to a bank branch, you can get a cashier's check issued immediately or within 15-20 minutes. Ordering one through online banking may take 1-2 business days.
About Alvin Yam, CFP
Alvin Yam is a certified financial planner (CFP) with over 15 years of experience working with individuals and corporations. Before founding Paraiba Wealth Management, he was a director at HSBC and a financial consultant at Charles Schwab. Yam is MoneyGeek's expert consultant on wealth management and personal banking.
Yam earned his bachelor's degree in political science from the University of California, San Diego, and his Master of Business Administration from Loyola Marymount University.
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