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What Is a Cashier's Check?

Say you’re ready to make a down payment on a house. The seller asks you to bring the payment in the form of a cashier’s check. A cashier’s check is a check with guaranteed funds, with money drawn from a bank’s own account. But how exactly does a cashier’s check work? What makes it different from a personal check or a money order? How do you get a cashier’s check? Let’s break it down.

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What Is a Cashier’s Check?

Cashier’s checks, also known as teller’s checks, are checks that draw on the bank’s own funds to make the payment.  The bank takes on the amount listed on the check to ensure that the payment will occur. Once a bank creates a cashier’s check they guarantee the availability of the funds. This makes it less likely for the check to bounce.

To get a cashier’s check, the bank will accept cash upfront or withdraw the amount from the payer’s account. Those funds then move to the bank’s own account. The money will then be available when the recipient cashes the check.

A cashier’s check is different from the personal checks you might be used to writing. When you write a personal check, the money is withdrawn from your personal account. While you still pay for a cashier’s check, the bank uses their own funds upfront. This makes a cashier’s check a more reliable and secure form of payment.

Why Use a Cashier’s Check?

People often use cashier’s checks for large expenses like real estate or automobile purchases. Since a financial institution guarantees the funds, the check will often clear without a struggle. This makes cashier’s checks one of the securest forms of payment.

Cashier’s checks are also useful in time-sensitive transactions. The funds are usually available immediately—in most cases, the next day. If you’re looking to make a big money purchase, a cashier’s check may be the quickest and safest way to go.

How Do You Get a Cashier’s Check?

What Is a Cashier's Check?

There are three ways to get a cashier’s check: a bank, a credit union or online.

You can purchase a check at the bank by speaking to a teller. You’ll need identification and other relevant information – the amount of the check, the recipient and any memo notes. If you have an account with the institution, the amount requested is removed from your personal account and moved to the bank’s own account. If you don’t have an account with the bank, you may be able to pay with cash. Once the teller prints and signs the check, it’s secured and ready for use.

Keep in mind that not all banks make out cashier’s checks to people who aren’t their customers. You might find it easiest to go to a bank you already have an account with. Whether you do that or choose a different bank, you might want to call the bank ahead of time to confirm that they can issue you a cashier’s check.

The process of getting a cashier’s check at a credit union is similar. You can usually get a cashier’s check from almost any credit union, regardless if you’re a member or not.

The last option is to order a cashier’s check online. This varies from place to place, but most banks will only offer this option to their customers. When you request a cashier’s check online, the bank will send a physical check to your mailing address. That makes it your responsibility to get it to the recipient. This does save you a trip to the bank, but it will still take longer since you have to rely on the mail.

Note that additional fees often come with the purchase of a cashier’s check. Depending on the institution, you may pay upwards of $10 or a percentage of the check amount.

What Are the Risks of Using a Cashier’s Check?

Cashier’s checks offer a relatively safe method of payment. Security features printed onto the check prevent any possible forgery. But counterfeiting scams can still occur, with the recipient usually falling victim.

A fraudulent cashier’s check will likely clear immediately when first deposited. This is because the bank has guaranteed that the funds will be available. But when the bank discovers that the check is a forgery, often a few weeks after the deposit, they take the money away. Unfortunately, the recipient often ends up with the responsibility for any money that may have already been spent.

Because of this, you might want to take some extra precautions, especially if you are wary about a check or the person who gave it. You can check with the bank to certify that the check is legitimate. You can also wait several days to make sure the check has cleared and the funds are legitimate before you use it. This way, there will be no reparations on your end if the check ends up being a counterfeit.

Alternatives to a Cashier’s Check

What Is a Cashier's Check?

There are multiple alternatives to cashier’s checks. One of these alternatives is a money order, another form of guaranteed payment. They’re usually more readily available since you can purchase them from banks, post offices and other retail stores. You can pay for a money order with cash or a debit card. This prevents them from bouncing without needing a bank for funds. Just note that money orders tend to have a cap amount of $1000. Cashier’s checks don’t have these limits, making them more useful for larger payments. Depending on the size of your purchase, money orders may be more convenient.

You could also consider certified checks. When making a certified check, the bank guarantees that the payer has enough funds in their personal account to cover the check. The bank freezes the amount until the check is deposited. But unlike a cashier’s check, the bank does not take on the payment itself. The funds draw from the personal account of the payer. The bank is only there to guarantee that the payer is financially able to make the payment.

Lastly, you can look into wire transfers. This usually involves sending money from one bank account to another. You can make a wire transfers online or at a bank branch if you want to pay in cash. To make the transfer, you’ll need to know the recipient’s bank, routing number and account number. The recipient can access the money almost immediately, making it a good option for long distance payments.

Bottom Line

Cashier’s checks offer a secure and quick method of payment. They come with almost immediately available funds and little risk of check bouncing. These guarantees make cashier’s checks the payment method of choice for any large purchase. They can also alleviate any worries you have about check security and certainty of payment. If you have those concerns, a cashier’s check provides a great option.

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Photo credit: ©iStock.com/YinYang, ©iStock.com/Alina555, ©iStock.com/sturti

Emily Zhu Emily Zhu writes on a variety of personal finance topics for SmartAsset. Her expertise includes retirement, credit cards, taxes and banking. She grew up in Brooklyn, but now splits her time between Brooklyn and Rochester. Emily is currently studying at the University of Rochester.
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