Table Of Content
Key Takeaways
- Cashier’s checks are used for a down payment for a home, buying a car, rent payments, and other types of cash purchases.
- To get a cashier’s check you have to visit the bank in person and have all of the necessary details at hand about the recipient of the payment.
- Using the cashier’s check is generally considered to be a safer and more convenient alternative to complete large transactions, compared to handling large amounts of cash.
What Is A Cashier’s Check?
A cashier’s check is an incredibly useful certificate or checks for carrying out large transactions. They are considered safer than handling vast amounts of cash.
Moreover, the bank issues these checks instead of the remitter (the individual purchasing something). The issuing bank guarantees a cashier’s check. This means that the bank itself covers the check’s amount and not the individual completing the purchase.
The amount in a cashier’s check is directly drawn from the bank’s funds under the said bank’s name. A cashier (also known as a teller) generally signs this check; therefore, the name.
The bank is primarily responsible for directly paying the check’s amount to the payee once that check has been created. This differs from a personal check drawn on your bank account, and your signature authorizes it.
How Does A Cashier Check Work?
A cashier's check works in the following way. An account holder heads to the bank in person provide their identification to the teller and requests the bank cashier for a cashier's check. The account holder must have the cleared funds in their bank account to get a cashier's check.
The cashier will request the dollar amount for the check and the payee and payor names. The cashier will then check the ID of the account holder, verify that all recent deposits have been cleared and that the person has adequate cash in the bank account to cover the transaction.
If you are the account holder, the teller will draw a certified cashier's check with yours and the payee's name on the check and then sign it. With that said, you can also use a cashier's check without a bank account.
The teller will then hand over the check to you, and that is about it! Depending on your relationship with the bank, the bank may charge you a nominal fee for drawing a cashier's check (more on the fees later).
How Does a Cashier's Check Look Like?
A cashier's check looks very much like a personal check, but with one distinct difference. A cashier’s check carries the signature of a bank teller or cashier rather than the purchaser. When you purchase a cashier's check at a bank, you just input the recipient and the amount.
The money is retrieved from your account when the recipient deposits the check with the bank.
Cashier Check Fees
The cost of a cashier's check can range from 10 to 15 dollars/check, depending on the financial establishment or bank you are using. Occasionally, the bank will take a particular percentage of the total check amount.
Hence, you must talk with your bank in advance and ensure that it is a flat fee rate regardless of the amount on the check. A cashier's check is usually considerably discounted or has no fee if you have a business account. This varies from one bank to another.
Here is the cashier check fee for some of the top banks in the United States of America.
Bank/Institution | Cashier Check Fee |
|---|---|
Chase | $8 |
PNC Bank | $10 |
Bank of America | $10 |
Capital One | $10 |
Discover | $0 |
Wells Fargo | $10 |
Ally Bank | $0 |
Citizens Bank | 1% ($5 minimum – $12 maximum) |
Citibank | $10 |
US Bank | $10 |
TD Bank | $8 |
The cashier's check works the same for the bank above (the process has been described above).
Common Uses for Cashier’s Checks
People usually use a cashier’s check for huge transactions where the payee wants to be certain that they are guaranteed payment.
Common uses for cashier’s checks include:
- Down payment on a house loan
- Down payment for an automobile (truck, car, etc.)
- Mortgage or rent payment
- Significant cash purchase
The chances of a normal check bouncing are considerably high with purchases such as these. Not many of us have several thousand dollars in our checking accounts. Using a cashier’s check avoids such predicaments ahead of time.
Pros and Cons of Using A Cashier’s Checks
Using a cashier check is very common, but there are also drawbacks to consider. Here are what you need to know:
Pros | Cons |
|---|---|
Guaranteed Funds | Fraud Risk |
Swift Access To Cash
| Cost Involved |
Very Secure |
- Guaranteed Funds
Paying with a cashier’s check is a guarantee that your payee will receive the money they are due. The bank is responsible for covering the total check amount since they are funding the said check.
In this manner, there is absolutely no question regarding whether the cash will be available or not when the cashier’s check is deposited.
- Swift Access To Cash
The cash from a cashier’s check is available to you immediately, and you do not have to wait for a check to clear.
You generally have to head to a bank in person to purchase a cashier’s check, which is sometimes inconvenient. However, having immediate access to money is a huge benefit.
- Very Secure
A cashier’s check comes equipped with additional extra security features such as watermarks, and occasionally, they need a legitimate signature from more than a single employee at the bank.
These extra protection layers make it exceedingly difficult to counterfeit, and the likelihood of fraud or theft is very low.
On the other hand, cashier’s checks have certain disadvantages as well.
- Cost Involved
Cashier’s checks do not cost much, but they are not free of cost. Generally, you will be paying a flat fee when you purchase a cashier’s check.
Banks have various charges, and few of them may charge you a % of the check amount instead of a flat fee.
- Fraud Risk
A cashier’s check is a safe way to carry out huge transactions. Nonetheless, they still possess an element of fraud risk.
For example, if you get a cashier’s check in the form of payment and it is valued at more than the buying price, the buyer might ask you to deposit check and return the extra money to them.
To safeguard yourself, do not send any money until you are certain that the bank has submitted funds to cover the entirety of the cashier’s check.
How Fast Does a Cashier's Check Clear?
Cashier's checks usually clear the next day. However, if there is a reason for further verification, the bank may put a hold on the check. Several reasons a bank may decide to place a hold on a cashier's check.
For example, if there is reasonable cause to doubt that the paying bank would honor the cashier's check, the bank can decide to place a hold on it.
Also, if the check is repeatedly overdrawn or made to an account opened in less than 30 days, the bank may suspect fraud and decide to hold it. The holding period may stretch for weeks.
How to Get a Cashier's Check?
Most credit unions and banks offer cashier's checks to their clients. You can get a cashier's check by following these steps:
-
1. Have The Details You Need
Have the recipient's name and precise personal identification ready before requesting the check. For example, a cashier's check is drawn on a bank's funds, but you provide the amount on the check to your bank in advance.
And since you cannot acquire a blank cashier's check, you require the payee's name and the person or business you are paying to. The teller will likely ask for your ID, so you must have that ready.
-
2. Visit A Branch
This is the regular procedure. However, some banks, particularly online-focused banks, make other methods available. If you require the cashier's check that day, head to a branch, locate a credit union, or a bank that accepts non-customers.
You may need to open a checking account at a credit union or bank if you do not have one already.
Credit unions and banks are the only establishments that can issue a cashier's check, and these institutions are not required to offer them to individuals who are not customers.
A few establishments do it, but most national banks in the U.S. only issue checks to account holders. Therefore, a money order can be the next-best option if opening a bank account is not practical for you (we will cover this later).
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3. Pay The Amount Of The Check And Fees
If the money is in a bank account at that institution, the check's total amount will be withdrawn when the cashier's check is issued or frozen in your account.
Have sufficient funds in the bank account to cover any fee as well. Cash will be the primary payment method if the bank offers checks to non-customers. Then, the cashier will issue the cashier's check and sign it.
-
4. Procure a receipt. Ask for payment proof.
Don't forget to get a receipt or payment proof. You may utilize this receipt to track the cashier's check.
Money Orders vs. Cashier's Checks
This is how money orders stack up against cashier's checks.
Differences | Similarities |
|---|---|
A place to get them | Don't include your account number |
Maximum issue | |
Credibility
|
- A place to get them
You can easily purchase money orders by heading to any place that sells them. These places include most post offices, grocery stores, convenience stores, and pharmacies. You may even acquire them at credit unions and banks.
However, you can only get a cashier's check from credit unions and banks, and you generally need a bank account to procure a check.
- Maximum issue
The maximum dollar limit is a crucial difference between cashier's checks and money orders. Money orders generally have maximum thresholds of about 1000 or 700, although the actual thresholds are contingent on the issuer.
On the other hand, cashier's checks are available for far great amounts. Hence, people commonly use cashier's checks for high transactions, such as a down payment on a house (this transaction can be several thousand dollars or even much more than that!)
- Credibility
A cashier's check is drawn against a bank, and the bank guarantees it, whereas other organization types issue money orders. Occasionally, a money order is considered to be not as secure as a cashier's check, and some establishments do not accept it as a substitute.
- Don't include your account number
This makes them considerably safer compared to personal checks containing much precious information.
Assuming that you do not trust or know whomever you are paying, it may be in your best interests not to reveal your phone number, full name, or home address.
Bottom Line
To summarize, a cashier’s check is a very convenient and efficient payment method. This is especially true if you want to make a large payment, such as a down payment on a real estate property. There are alternative payment methods outside cashier's checks, such as money orders, certified checks, wire transfers, and social payment apps.
Firstly, a cashier’s check is ideal for big purchases, but they are not too good for day-to-day payments. Furthermore, when using a cashier’s check for small amounts, cashier’s check fees generally outweigh the advantages of using the check.
FAQs
Does a cashier's check need to be signed?
Cashier’s checks do not need to be signed by the person sending money. The check is drawn against the bank’s account, not your account, and as such requires the signature of the bank teller, not yours.
The bank only needs to confirm that the check is not counterfeited. This is done by looking out for watermarks that authenticate the check or any discrepancies in the information provided.
What if I lose the cashier's check?
If you lose a cashier's check, try to notify your bank as quickly as possible. You may be required to fill a declaration of lost form which essentially verifies that your check is lost and cannot be found.
Processing can take as much as 90 days after filing. The bank would also place a $30 levy when you cancel a cashier's check.
Is it safe to take a cashier's check for a car?
Aside from cash, accepting cashier’s check as payment for a car is a secure way of transacting. However, there still exists the propensity for fraud. There is no guarantee that the buyer has the money in the account to cover the check.
As such, you may find yourself with saddled with a bounced check which can leave you with multiple transaction fees. Before handing over the keys, try to verify the authenticity of the check. Check the signature for trace lines, inspect the bank’s logo and make sure that the bank’s name is printed with shiny material.
Can you stop payment on a cashier's check?
You can place a Stop Order payment on a cashier’s check if lost or stolen. The steps to accomplishing this vary from bank to bank, but there is usually fee which would have to pay to activate the Stop Order payment on the cashier check.
However, the refund process could take as much as 3 months if your request is granted.
How to spot a fake cashier's check?
There are various ways to spot a fake cashier’s check. Check to see if the number amount on the check matches the words. Also, check if the account number printed on the check is shiny. if it is not shiny, it is most likely a fake.
Lastly, carefully examine the signature on the check for any form of discrepancy. Ascertain if the writing was traced or shaky.
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