When you buy something in a store, there are various ways to pay for it. You can use a credit card, a debit card, an electronic payment app, or good old-fashioned cash.
But for really big purchases, like buying a home, these forms of payment don’t work. Buyers don’t accept cards for transactions this big, and it isn’t practical to carry around enough cash for a down payment.
What you need in this situation is a secure payment method that works for any amount you have in the bank. Cashier’s checks serve exactly this purpose.
What Is a Cashier’s Check?
A cashier’s check is a special kind of check issued and guaranteed by a bank. It’s also called a bank check or bank draft.
When you write a personal check, the funds for it come out of your checking account. With a cashier’s check, by contrast, the money comes out of a separate account belonging to the bank itself. The bank draws money out of your account ahead of time to cover the cost.
This makes cashier’s checks more secure for recipients, or payees, than personal checks. They know that you’ve paid for it up front and the bank has set aside enough money to cover it.
Cashier’s checks also come with extra security features to show they’re genuine. They usually have a watermark — a word or image embedded in the paper that shows when you hold it up to the light. They also carry the signature of at least one and sometimes two bank employees.
How Does a Cashier’s Check Work?
When you get a cashier’s check, the bank withdraws the amount of the check immediately from your checking or savings account and sets it aside in the bank’s account. Most banks also charge a small fee for the service, which comes out of your account as well.
Then it prints a check for the same amount payable only to the recipient. The bank prints its own account number, rather than yours, at the bottom of the check. The bank teller or cashier, or both, signs it to prove it’s genuine.
When the recipient deposits the check at their bank, the funds come out of your bank’s account. The funds go into the payee’s account quickly — usually within one day. They don’t have to wait days for the check to clear like they would with a personal check.
Afterward, both banks keep a record of the transaction. This creates a paper trail so you can prove that you made the payment and the payee received it.
What Is a Cashier’s Check Used For?
A cashier’s check is handy in any situation where you need to move a large amount of money — at least $1,000 — quickly and securely. Some examples include:
- Buying a home and other real estate transactions
- Brokerage transactions that require a quick settlement
- Buying or selling a car, boat, or other vehicle
- Paying a security deposit on an apartment
- Paying college tuition and fees
- Receiving a lump sum payment from a lawsuit
- Receiving a lump sum withdrawal from an investment account
- Repaying a large personal debt
Cashier’s checks can also be useful in cases where you don’t want the payee to have your bank account information. For instance, when buying a used car from a seller you don’t know well, you might pay with a cashier’s check to keep your account details private.
How to Get a Cashier’s Check
The most straightforward way to get a cashier’s check is to go to your local bank branch and request one. To do this, you must provide several pieces of information:
- Payee’s Name. This is the person or business who will receive the check. Make sure you get the name right so they don’t have problems cashing it.
- Exact Amount to Be Paid. In most cases, you must have sufficient funds in your personal bank account to cover the amount of the check plus the fee. At some banks, you can’t get a cashier’s check for less than a certain minimum amount, such as $1,000.
- Your Information. Finally, you must provide your own name and account information (unless you are paying in cash, as discussed below). Make sure to bring a valid form of personal ID, such as a driver’s license, to prove your identity.
The teller will transfer the money from your account and give you the check and a receipt. If you don’t get a receipt, ask for one.
Some banks, especially online banks, allow you to request a cashier’s check online or over the phone. However, this takes longer because the bank must mail the check to the payee. At some banks, it’s even slower because they insist on mailing the check to your verified mailing address. You must wait to receive it and then pass it on to the recipient.
Cashier’s Checks vs. Certified Check vs. Money Order
A cashier’s check isn’t the only secure, in-person payment method. Two notable alternatives exist: money orders and certified checks.
Money Order
A money order is basically a prepaid check bought with cash, so it can’t bounce.
One advantage of money orders is that you don’t need a bank account to get one. You can buy them not only at banks and credit unions but also at post offices, retail stores such as Walmart, and money transfer businesses such as Western Union.
There’s a fee for buying a money order, but it’s generally quite low — sometimes less than $1 and almost never more than $5. However, there are limits to the amount you can send with one. For instance, the U.S. Postal Service only issues money orders for up to $1,000.
Certified Check
Another option is a certified check. This is an official check like a cashier’s check, but with one key difference: the money comes out of your account, not the bank’s. When you take one out, the bank certifies that your signature is genuine and sets aside money in your account to cover the payment.
Like cashier’s checks, certified checks are available only from banks and credit unions. Banks charge similar fees for both types of check. However, like money orders, certified checks are usually limited to $1,000 or less.
Cashier’s Check Fraud
Cashier’s checks are more secure than other forms of payment, but they’re not foolproof. Scammers can create fake checks that look authentic, even copying security features like watermarks.
A fake cashier’s check can create more problems than a bad personal check. Because the funds are available so quickly, you might spend them before learning the check was a fake. At that point, you’ll have to pay the money back to the bank. You could also be on the hook for bank fees such as an overdraft fee, insufficient funds fee, or returned check fee.
Scams Involving Cashier’s Checks
The most common way scammers use cashier’s checks is to pay you with a fraudulent check for something you’re selling on Craigslist or another online marketplace. By the time you discover the check is fake, the buyer is long gone, and so are your goods.
Other cashier’s check scams include:
- Phony Sales. This is the opposite of the Craigslist buying scam. A seller at an auction or online marketplace requests a cashier’s check in payment for an item and promises to deliver it. But you never receive the item, and you can’t recover your money.
- Lottery Scams. Scammers often target senior citizens with this one. They say you’ve won a lottery or sweepstakes, perhaps in a foreign country. But to claim your winnings, you must first pay a fee by cashier’s check. Of course, you never receive any money.
- Inheritance Scams. This is a variation on the lottery scam. Instead of winning a lottery, you’ve received an inheritance from a long-lost relative. You just need to send a cashier’s check to claim the money.
- Work-From-Home Scams. In a work-from-home scam, con artists offer you a job such as mystery shopping. They send you a bank check as payment, but then tell you it was too big and ask you to return part of the money by wire transfer. Only after you’ve sent them money out of your own account do you learn the check was fake.
- Property Rental Scams. You answer a listing for an apartment that looks like a great deal. The landlord requests a cashier’s check for the security deposit. Once the money is gone, you learn they don’t really own the property.
How to Avoid Cashier’s Check Scams
There are several ways to avoid fraud when using cashier’s checks. The best way to protect yourself is to accept bank checks only from people you know and trust.
If you must take one from a stranger, ask to receive it in person at the bank that issued it. The teller there can confirm that the check is genuine and there are funds in the account to cover it.
If you receive a cashier’s check by mail, examine it carefully. If it’s in black and white or looks like it was printed on a cheap color printer, it’s a fake. Other red flags include smeared ink or missing details, such as the bank’s routing number or the watermark.
Also, never accept a check if the space for the payee’s name is blank. These checks are always made out to a specific individual, so a blank space is a sure sign of a fake.
If the check looks genuine, contact the bank to make sure. You can take it to a bank branch or call the customer service line. Don’t call the phone number listed on the check itself, which may also be fake. Look it up online and call that number.
Finally, after depositing a bank check, don’t try to use the money the minute it becomes available. Wait several days to make sure the check has cleared.
Cashier’s Check FAQs
Still looking for more information about cashier’s checks and how to use them? Check out this list of common questions and answers.
Do You Need a Bank Account to Get a Cashier’s Check?
Many banks issue cashier’s checks only to their account holders. However, there are a few that let you buy one without an account. In this case, you must bring cash to the bank to pay for the check up front.
It’s also possible to get a cashier’s check without a bank account in certain specific situations. If a deceased person left you money in their will, their bank may give it to you in the form of a bank check. Or, if you close an account that’s overdrawn, the bank may require you to buy a cashier’s check to pay back the overdraft.
What Banks Offer Cashier’s Checks to Customers Without an Account?
Many credit unions are part of a shared branch network called Co-Op Financial Services. If you bank at one of them, you can take out a cashier’s check at other credit unions that belong to the network. However, not all credit unions offer cashier’s checks, so call ahead to check.
There are also a few banks where you can purchase cashier’s checks as a noncustomer without an account. However, the list is ever-changing. Your best bet is to call up local bank branches until you find one that offers this service.
What Does a Cashier’s Check Look Like?
A cashier’s check looks similar to a personal check but with a few key differences. It has the bank’s name and account number on it instead of an individual’s, and it typically has the words “Cashier’s Check” at the top. It’s also likely to have a watermark.
What Information Is on a Cashier’s Check?
The information on a cashier’s check includes the bank’s name, account number, and routing number. There’s also a line for the payee’s name and a line for the amount of the check.
What Is the Difference Between a Cashier’s Check vs. a Personal Check?
There are several differences between a cashier’s check and a personal check:
- A cashier’s check comes from the bank’s account, rather than your own account.
- A cashier’s check clears faster.
- You must go to the bank to get a cashier’s check, while you can write a personal check anywhere.
- Banks charge a fee for issuing a cashier’s check.
How Much Does a Cashier’s Check Cost?
Most banks charge between $5 and $15 for this service. However, some banks provide it at no charge to account holders, especially those with premium accounts.
If you order a cashier’s check online or by phone, there may be an additional charge for delivery. This can increase the total cost to as much as $20.
How Long Does It Take for a Cashier’s Check to Clear?
Cashier’s checks worth up to $5,525 typically go through by the next business day after being deposited. For larger checks, banks often place a hold on the amount that’s over $5,525 until the issuing bank has cleared the check. This can take up to a few days.
What Happens if I Lose a Cashier’s Check?
If you lose a check you purchased from your bank or credit union, you can replace it, but it’s a complicated process.
The financial institution usually requires you to get an indemnity bond for the amount of the check from an insurance company. This makes you legally responsible for the cost if the lost check is found and presented for payment.
Many insurers offer indemnity bonds, but they’re not easy to get. And even once you have one, the bank is likely to make you wait 30 to 90 days for a replacement check, just in case the first one turns up again.
If you lose a cashier’s check you received from someone else, you can ask them to give you another check, but they have every right to refuse. If they do, all you can do is get an indemnity bond, take it to the bank that issued the lost check, and ask them to honor it.
Can I Stop Payment on a Cashier’s Check?
If you bought a cashier’s check and haven’t sent it yet, you can take it back to the bank and ask to cancel it. If you’ve already sent the check, it’s technically possible to stop payment on it, but not all banks allow it. You’ll have to call up the bank and ask what its policy is.
If you are able to stop payment on a cashier’s check, expect to pay a fee for it, which can be $30 or more. It may also require you to purchase an indemnity bond for the canceled check. And it can take up to 180 days for your bank to return the money to your account.
Final Word
In the modern world, cashier’s checks are less important than they used to be. There are other ways to transmit money securely, including bank wire transfers and money transfer apps like PayPal, Zelle, and Venmo.
These new methods are faster and more convenient than cashier’s checks. They’re also impossible to lose, and they can’t be forged. However, bank wire transfers often come with higher fees than bank checks. Payment apps typically have lower fees, but there are limits on how much money you can send.
Cashier’s checks remain useful for situations where you need to transfer a large amount of money securely or want to keep your banking information hidden. But because of the fees and hassle involved, it’s worth looking into other methods before using one.