Check out the Chase Auto Education Center to get car guidance from a trusted source. Both of these instruments offer some form of protection if they get lost or stolen. If anybody pays you with one of these instruments and then asks you to return money, it’s most likely a scam. All users of our online services are subject to our Privacy Statement and agree to be bound by the Terms of Service. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
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An individual can use a cashier’s check instead of a personal check to guarantee that funds are available for payment. A cashier’s check is secure because the individual must first deposit the amount of the check into the issuing institution’s own account. The person or entity to whom the check is made out is guaranteed to receive the money when cashing the check. For large transactions, like a real estate closing, wire transfers are the main alternative to cashier’s checks. Wire transfers can be faster and are best for virtual closings or international transactions.
When to use a cashier’s check
The main difference between a money order and a cashier’s check or certified check is that you don’t necessarily need a bank account to purchase a money order. You can also get money orders at other locations, such as grocery stores or post offices. A wire transfer is a popular and generally secure way of sending money electronically.
Where Can You Get a Cashier’s Check?
A cashier’s check provides a measure of security to everyone involved in the transaction. The payee knows the check won’t be returned because it’s being drawn from the bank’s account. Because cashier’s checks usually have watermarks and require signatures from one or more bank employees, the bank has the reassurance that the check won’t be counterfeited. And you don’t have to worry about sharing your personal checking account information with the payee, as the check isn’t drawn from your account.
They are sometimes forged and used by criminals to solicit payments from their victims[1]. This is much different than writing a check from a personal checkbook, regardless of their bank balance. Cashier’s checks require permission from both the customer and the bank to issue the check, which is why they are considered more secure.
As with personal checks, you can use cashier’s checks to pay bills, make purchases or pay other debts owed. But there are situations when it’s better to use a cashier’s check to send or receive payments. This is generally because cashier’s checks can offer more security than personal checks. In recent years, more financial institutions have made cashier’s checks available through their online portals. Ordering cashier’s checks online typically requires an account with the institution and may carry the added costs of postage and delivery fees. Some banks will let existing customers purchase cashier’s checks over the phone or online.
However, there are a few circumstances when the bank may put a hold on a cashier’s check. Real cashier’s checks are one of the safest forms of payment, but cashier’s check scams do exist. While there are many different variations of fake check scams, the most common denominator is that the sender will ask the recipient to send money back to them after depositing the check. Many banks will require you to have an account with them in order to get a cashier’s check.
Money orders lack the backing of a bank’s funds but are pre-paid by the sender, offering a similar level of confidence and security to the recipient. While cashier’s checks offer unique benefits, other payment methods may be equally suitable for certain transactions. Let’s look at some cashier’s check alternatives and their respective advantages and disadvantages. Some payment apps limit how much you can send in a single transaction and per day. If you have a large amount to send, you may be better off using a cashier’s check or one of the other options mentioned above. Because of the numerous hassles that would result from losing the cashier’s check, take the paper check directly to the recipient, if possible.
You also must supply the name of the payee, because banks cannot issue blank cashier’s checks. On the whole, a cashier’s check offers higher security than the use of a personal check or money order. Different types of transactions are suited to different types of payment. For larger transactions, providing (or receiving) a cashier’s check may be the best choice. That doesn’t mean that cashier’s check scams don’t exist, however. The biggest risk of accepting a cashier’s check as a form of payment is the possibility that it might be fraudulent.
If you deposit more than $5,525 on a given banking day, the bank can hold any money over that amount until the check has cleared. Banks can extend a hold if it can show that the extension is reasonable. If you accept a cashier’s check from someone you don’t know, check with the bank on the check first. They’re not as secure as a bank check, but they don’t bounce because the buyer must pay the vendor upfront for the full amount of the money order, plus the vendor’s fee. Personal checks, however, can take several business days or more to clear. The bank will take the money from your account immediately, so make sure you have enough to cover the cost of the check amount and fee before you visit the branch.
When you’re on the receiving end of a cashier’s check, take care to avoid fraud. Only accept a cashier’s check from someone you know, if possible, and give the check time to clear after depositing it into your bank account before using the funds. Some banks allow cashier’s checks less than a certain amount to be deposited using their mobile banking app. Other banks require that cashier’s checks be presented physically. Unlike an electronic check, or e-check, you generally cannot spend a cashier’s check online to make purchases. Money orders and cashier’s checks are both useful tools for making payments, and they even have a similar appearance.
You can buy money orders by walking into any place that sells them, including most grocery stores, post offices, pharmacies, and convenience stores. However, cashier’s checks are only available from banks and credit unions, and you usually have to have an account there to get one. While having a bank account is generally required to get a cashier’s check, some institutions may offer options for non-account holders for an additional fee.
- Banks can extend a hold if it can show that the extension is reasonable.
- It’s good to be prepared with your identification, double-checked information for the person or business you’re paying, and the amount of the check.
- If a payment goes missing, you’ll want to get your money back or you’ll need a replacement.
- We are an independent, advertising-supported comparison service.
- The check can also take a few business days to reach the final destination.
Always get a receipt for a cashier’s check to protect yourself in case it is lost or stolen. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Some banks specify an expiration date on the front of the check. If you’re looking to send a smaller amount of guaranteed funds to someone (less than $1,000), a money order could be a better option. The bond, which is not that easy to get, makes you liable for the replacement check, according to the U.S. We believe everyone should be able to make financial decisions with confidence.
It is considered a very secure form of payment since funds are promised to be in the account. That’s because replacing a lost or stolen cashier’s check isn’t often an easy process. This essentially reassures the bank that they won’t have to cover the payment for both checks if the lost one is found. However, some banks offer these services only to customers, so it’s a good idea to call ahead to confirm whether the service is available. Cashier’s checks at traditional banks typically cost around $8 to $15.
Scott Birrenkott, director of legal at the Wisconsin Bankers Association says to see if there’s anything suspicious about the item. The fraudsters are good, but the bank’s logo or ink could tell you there’s something off about the item. “Expert verified” means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.
You can ask a representative whether it’s possible to get a replacement check. However, banks usually won’t be able to issue stop payment like with personal checks, since it’s a guaranteed form of payment. Cashier’s checks also may settle faster than personal checks because the bank’s funds are backing an authentic official bank check. But there are some situations where a bank might not accept an authentic cashier’s check.
Cashier’s checks look like other payment types, such as certified checks or money orders. Get more from a personalized relationship offering no everyday banking fees, priority service from a dedicated team and special perks and benefits. Connect with a Chase Private Client Banker at your nearest Chase branch to learn about eligibility requirements and all available benefits. Losing a cashier’s check isn’t the end of the world, but it can present a significant speedbump for your transaction. Taking extra care when handling and transporting a cashier’s check can help save you from a headache. In the case of a lost, damaged or stolen cashier’s check, you can ask your bank to reissue the check.
Transfers can be instant and—depending on where the money for the transfer comes from—you may pay zero fees. To get a cashier’s check, have a government-issued photo ID with you, such as a driver’s license. Have enough cash on hand or funds in your account to pay the bank the full amount of the check.
