Cashier’s Check: What It Is, Plus How and Where to Get One
If you’ve ever made a large purchase, chances are you’ve used a cashier’s check. Known as a more secure way to pay, cashier’s checks are often required to cover such expenses as a car or a down payment. Read on to learn more about this helpful payment option and how to get one for your next big spend.
What Is A Cashier’s Check?
A cashier’s check (or bank check) is a check with a value that’s guaranteed by a bank and drawn against the bank’s funds, rather than an individual’s. The bank can guarantee the money because you’ve already paid the bank that amount, either by bringing cash or transferring the money from your account. Along with guaranteed funds, the check is also more difficult (but not impossible) to counterfeit, making cashier’s checks one of the safest ways to receive payment. And since the funds have already been paid to the bank, they also clear much faster, usually within 1 day of depositing the check.
Since it’s almost impossible for a cashier’s check to bounce and the only person who can cash it is the payee listed on the check, this payment method is typically required to make large purchases, such as a down payment for a house or a car.
How To Get A Cashier’s Check In 6 Steps
If you’re about to pay a serious amount of cash for something, the seller or lender may require you to pay via cashier’s check. While it takes more effort than swiping your credit or debit card or signing your name, it isn’t complicated to get a cashier’s check. Here’s how to get one in six simple steps.
1. Gather All Information
When you request a cashier’s check, the bank will print out all of the information that will appear on the check. That means you’ll need to have the exact name – and correct spelling – of the payee and the exact amount of money you’re paying them.
2. Ensure You Have Enough Money To Cover All Expenses
Along with the amount of money you’re giving the payee, you’ll also need to pay a fee for the cashier’s check. More on the later. If you are paying for the check by transferring funds from your savings or checking account, make sure you have sufficient funds in that account. If not, you’ll need to deposit more money before requesting the check. If you’re paying cash, you’ll need to make sure you have enough on hand. Either way, you need to ensure you have enough money to cover both the check amount and the fee to get the check.
3. Go To The Bank Or Credit Union To Request The Cashier’s Check
You can only get a cashier’s check from a bank or credit union and, most of the time, you will need to request it in person and show your driver’s license, passport or other government-issued photo ID. Some banks require you to be an account holder to get a check. If you’re not a member of the bank you’re getting the check from, verify that you can get one there before you request it.
At the bank, you’ll provide the teller all the information that’s needed to write the check and they’ll fill it out for you. The process won’t take long and you’ll receive the check the same day.
4. Review The Check
Review the check to make sure there are no errors in spelling or amount. Make sure all information is correct before you leave.
5. Keep The Check In A Safe Place Until You Use It
If there’s some time between getting the check and handing it over to the payee, make sure you keep it in a safe place. You may be able to recoup the money or cancel the check if it’s lost or stolen, but it may involve notifying the bank, filling out a form and waiting up to 90 days. You could also incur a fee.
6. Deliver The Check In Person
As mentioned above, it can be cumbersome to report, cancel or recoup the costs of a lost or stolen check. To lessen the risk of losing the check, opt for hand-delivering the check to the seller. That way, too, you’ll be able to confirm that the payee received it. If you absolutely must have the check delivered via mail, make sure you can track the check and consider insuring it as well. Once the check is delivered, you’ll also want to verify with the payee that they received it.
How Much Does A Cashier’s Check Cost?
Some banks offer cashier’s checks for free if you’re an account holder, while other institutions charge a fee of around $10. Before requesting the check in person, call your institution and ask if there is a fee. Again, you’ll want to make sure you have enough money to cover this fee, along with the amount of the check.
How Cashier’s Checks Differ From Certified Checks And Money Orders
There are several ways to pay an expense, including a variety of checks. This can get a little confusing, so let’s break down the difference between a cashier’s check, certified check and money order.
Cashier’s checks are only provided by a bank or credit union and can only be cashed by the payee. The bank prints out the payee’s name and the exact amount to be paid on the check. The amount of money on the check is guaranteed by the bank because the money is taken from the bank’s account. The bank can draw from its account because the money is already paid to the bank.
Certified checks are personal checks that have been certified by a bank to be a genuine check with sufficient funds to back it up. With a certified check, the money is drawn from your personal account, not the bank’s. The check will include the bank’s signature and have the words “certified” or “accepted” printed on it.
Money orders can come from a bank or credit union, but you can also get them at other places, like a grocery store, convenience store or post office. Like cashier’s checks, the funds from a money order are withdrawn from the institution’s account and were already paid by the person requesting the check. Unlike cashier’s checks, money orders typically have a limit of around $1,000.
Avoiding Cashier’s Check Scams
Though one of the safest ways to pay for a big purchase, cashier’s checks are not totally immune to fraud. Here are a few examples of cashier’s check fraud:
- Someone uses a fake cashier’s check and receives the item before the check clears and you can’t get the item back.
- Someone uses a fake cashier’s check that is above the sale price and asks you to send back the excess money to reimburse them or someone else.
- Someone uses a fake cashier’s check, then “changes their mind” and asks you to reimburse them for the amount paid.
Usually, once you’ve paid the scammer or spent the money you thought you had, it’s too late and the bank can’t do anything to help you.
To help avoid cashier’s check scams, take these precautionary steps:
- Don’t accept cashier’s checks from people you don’t know.
- Only deal with cash when selling something through an online marketplace.
- If a buyer insists on using a cashier’s check, tell them you will not send the item they’re purchasing until the check clears.
- Never accept a cashier’s check that is above the sale price. Instead, request a new check.
- Check for signs of a fake check, including misspelled words, poor quality paper, missing watermarks and evidence the check was photocopied.
- Look up the contact information and call the issuing bank to make sure the institution and the check are genuine.
- Never accept a check that has a blank space for the payee or has information written into any space. Legitimate cashier’s checks will have all of that information printed out.
In any event, the best thing to do is to wait until the check clears to do anything with the money. Once you deposit a cashier’s check, up to $5,000 is available to you the next day. However, just because the money is available to you, doesn’t mean it actually exists yet. And if you spend the money that’s available to you and the check ends up being fake, you’ll owe the bank the amount you used. If the check is fake, it could take days or even weeks after you deposit it to bounce. Be cautious and wait to spend the money, reimburse the buyer or send the merchandise until after the check clears.
Summary: Cashier’s Checks
Cashier’s checks are one of the safest ways to pay a big expense and are often required for purchasing a car or making a down payment in the later stages of buying a home. Though they are safer than personal checks, they are not impervious to scams. If you’re a seller, be extra cautious when accepting a cashier’s check from a buyer. As a buyer using a cashier’s check, ensure a smooth process by having all of the correct info before requesting the check and making sure you have sufficient funds to cover the check amount and the cost to get the check. It may be an extra step in the process to get a cashier’s check, but it can help complete your purchase with less worry for you and the seller or lender.
To learn more about different payment options or for tips on saving up for your next big purchase, check out the financial resources we have waiting in our Learning Center.
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