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Differences of a Cashier’s Check vs. Certified Check


A cashier’s check, backed by the issuing bank’s own funds, provides an ironclad guarantee that the payment will be honored, making it a go-to choice for transactions requiring absolute certainty. On the other hand, a certified check offers a slightly different form of security; the bank verifies the payer’s available funds and earmarks them specifically for the check, providing reassurance to the recipient that the check will not bounce. Whether you’re closing on a house, buying a car from a private seller, or engaging in any transaction where trust and verification of funds are required, understanding the differences between both instruments is important. 

No matter what financial questions you have, a financial advisor may be able to help you make a long-term plan to build wealth and fund a healthy retirement.

What Is a Cashier’s Check?

A cashier’s check is guaranteed by the bank or financial institution that issues it, providing a secure alternative to personal checks or cash. This guarantee is possible because, unlike a personal check, the funds for a cashier’s check are drawn not from the payer’s account but from the bank’s own reserves. This means that the recipient can trust the check will not bounce, as the bank is responsible for covering the amount indicated.

Let’s say, as an example, that you’re buying a car from a private seller. You’ve agreed on a price, but the seller requests a secure form of payment to ensure that the deal goes smoothly. In this scenario, a cashier’s check would be preferable to a personal check, which could be subject to insufficient funds, or carrying a large sum of cash, which could be unsafe.

To acquire a cashier’s check, you must follow a specific procedure set forth by the banking institution. Initially, the individual must present a valid form of identification to authenticate their identity. This is a critical step in preventing fraudulent activities and ensuring the legitimacy of the transaction. Following identification, the individual must have the necessary funds in their account or provide the equivalent amount in cash. The bank then deducts the amount from the customer’s account or the cash provided and issues the cashier’s check. It is common for banks to charge a service fee for issuing a cashier’s check, which can vary from $5 to $15, depending on the bank and the check amount. 

What Is a Certified Check?

A certified check is a payment instrument that provides a higher level of security than standard personal checks. Taking the example from earlier, if you’re buying a car and want to ensure that your payment goes through without a hitch, you can use a certified check. To get this type of check, the bank first verifies that you have enough funds to cover the check’s amount. Then, the bank holds these funds, guaranteeing the payment to the car seller.

Major Differences of Cashier’s vs. Certified Checks

A couple preparing documents for a personal transaction with a cashier's check.

When it comes to making secure financial transactions, cashier’s checks and certified checks are two instruments that provide a higher level of assurance when compared with personal checks. A cashier’s check is a form of payment issued by a bank, drawn from the bank’s own funds, and signed by a cashier, making it a direct obligation of the bank. Certified checks, on the other hand, are personal checks with added security. The bank verifies the drawer’s account for available funds and earmarks the check amount, preventing those funds from being used for other purposes.

Cashier’s checks are often deemed more secure due to the bank’s direct involvement and the immediate withdrawal of funds from the bank’s account. The process for obtaining a cashier’s check typically involves the purchaser providing the bank with the amount of the check plus any applicable fees, after which the bank issues the check to the designated payee. Certified checks, while secure due to the bank’s verification, still depend on the customer’s account for funding.

When to Use Each Type of Check

Cashier’s checks are the preferred method of payment in real estate transactions, for example, where a buyer must provide a secure, guaranteed form of payment for substantial amounts, such as a down payment or closing costs. Similarly, when purchasing high-value items like vehicles or conducting large business transactions, the assurance that the bank stands behind the check makes cashier’s checks a favored option.

Certified checks, while offering less security than cashier’s checks, are suitable for everyday transactions where the payee requires verification of funds but not the full backing of a bank. These checks are often used in personal dealings, such as the private sale of a vehicle, where the seller may insist on a certified check to confirm that the buyer has the necessary funds. They are also used in situations where the payee wants to mitigate the risk of a bounced check but does not require the heightened security of a cashier’s check, such as when paying for services like home renovations.

Bottom Line

A couple meeting with an advisor to discuss a secure transaction for a purchase.

Cashier’s checks are commonly used in high-stakes transactions such as real estate closings and big purchases where guaranteed funds are required. Certified checks, on the other hand, are used for personal dealings where a lower level of guaranteed funds is required. Both can fulfill your needs, depending on what you’re trying to accomplish.

Tips for Financial Planning

  • A financial advisor can help you plan for big life events. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • No matter which type of check you use, you’ll want to make sure you have a reliable bank. Check out our guide to some of the best banks in America.

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