Everything You Need to Know
Suppose you want to buy a car, make a down payment to purchase a home or pay the first last month’s rent to lease an apartment. You may be unable to use a personal check or credit card for these transactions, you don’t want to walk into a dealership or leasing office with a big wad of cash.
A better option is a cashier’s check. You may have to pay a small fee to get one, but it can be well worth the cost extra effort to make your financial transaction faster safer.
What Is a Cashier’s Check?
A cashier’s check is a paper check that’s drawn against your bank’s account rather than your personal account. Your bank stands behind the check guarantees that the recipient, or payee, can deposit or cash it receive the promised funds. Some banks call cashier’s checks “official checks.”
Recipients may prefer cashier’s checks because:
- They’re almost equivalent to cash, but the risk of theft is lower because only the payee can deposit a cashier’s check.
- They’re guaranteed. Unless a cashier’s check is fraudulent, there’s almost no risk that it will be declined, or “bounce.”
- They’re fast. Banks must make the first $5,525 available within one business day. However, additional funds or amounts the bank suspects may be fraudulent may be held longer.
The name “cashier’s check” refers to the bank’s teller, who may also be called a cashier.
Despite the name the association with banks, it’s not only banks that issue cashier’s checks. Credit unions also offer them.
Where to Get a Cashier’s Check
You can get a cashier’s check from a bank or credit union you have an account with. You may have the option to request a cashier’s check from your online account, or you can visit a branch to get a check. The cashier’s check will be funded by the money in your account.
How Much Do Cashier’s Checks Cost?
Expect to pay a fee of about $8 to $15 to get a cashier’s check from your bank or credit union.
These are the cashier’s check fees at major U.S. banks:
How to Get a Cashier’s Check
Follow these steps to get a cashier’s check:
- Go to your bank or credit union, or contact it online. Bring a government-issued ID with you to the bank, such as a driver’s license or passport.
- Tell the bank the amount of the cashier’s check the recipient’s name. Both will be printed on the check.
- Ensure your checking account has sufficient funds to cover the cashier’s check. If the account doesn’t, then make a deposit or transfer to cover the amount.
- Pay your fee receive your cashier’s check. If you don’t do this in person, the bank will mail you the check. You’ll need a U.S. mailing address to receive it. You can’t print cashier’s checks yourself at home.
Most banks issue cashier’s checks only to their own customers, so you’ll typically need an account to get this type of check from a bank. Credit unions often will issue cashier’s checks to members of other credit unions their members.
Cashier’s Check Alternatives
Cashier’s checks, money orders certified checks are all alternatives to personal checks paper money. They have that in common, yet there are some differences, too.
Like a cashier’s check, the bank guarantees a certified check. The bank verifies that the check writer’s account contains the funds to back the certified check keeps the funds in the account until the check is deposited or cashed.
“A certified check is a check that’s drafted against your account but certified by the bank as being payable, i.e., from a valid account with sufficient funds,” says Leibel Sternbach, a financial advisor founder of Yields4U, an investment advisory firm in Plainview, New York.
The difference between a cashier’s check certified check is that the funds to pay the cashier’s check come directly from the bank, rather than the check writer’s account.
“A money order is the equivalent to cash,” Sternbach says.
Money orders may be purchased with cash or a debit card. They’re available not just from banks credit unions, but also from nonbank outlets, such as Western Union, the U.S. Postal Service some retailers. They’re usually limited to $1,000.
Unlike with a cashier’s check or certified check, which is printed with the recipient’s name when issued, you fill in the name of the person or entity receiving the money order.
When Should You Use a Cashier’s Check?
You may want to use a cashier’s check, or you may have to, for transactions that involve a large sum of money or transactions that call for an added layer of trust, such as:
- Buying a vehicle.
- Closing on a house.
- Transactions beyond the limits of your credit or debit card.
How Can I Cancel a Cashier’s Check?
It’s difficult to order a stop payment on a cashier’s check. However, you can contact your bank to request a cashier’s check cancellation, it may be allowed if you are dealing with loss, theft or fraud.
You’ll likely need to file a declaration of loss with the bank, which states that you lost possession of the cashier’s check. You may also be required to purchase an indemnity bond, which protects the bank if a lost cashier’s check is presented for payment. After that, you’ll get your funds back within about 90 days.
How Long Is a Cashier’s Check Good For?
The expiration date on a cashier’s check depends on the bank. Some cashier’s checks have a “void after X days” disclaimer, usually between 60 to 180 days. Other cashier’s checks have no expiration date should remain valid as long as the bank operates.
Watch Out for Cashier’s Check Scams
Cashier’s checks are popular with scammers, so you should be wary if you receive one. Typically, these scams ask you to deposit a cashier’s check send payment as a refund or to a third party, but you won’t get any money from the fraudulent cashier’s check will lose the money you send.
Some typical cashier’s check scams include:
- Online purchases: A scammer may pay using a fraudulent cashier’s check, you don’t find out it’s a fraudulent check until you ship the goods. Additionally, a scammer may send funds over the purchase price ask you to “refund” the excess.
- Foreign lottery or estate beneficiary: A scammer may inform you that you’ve won a foreign lottery or are the beneficiary of an estate but must pay a tax or fee before receiving funds. The scammer will send you a cashier’s check to cover the fee ask you to deposit the check wire the fee to a third party.
- Mystery shopping: A scammer may ask you to perform as a mystery shopper, using a cashier’s check to pay you reimburse you for your mystery shopping purchases, but you’ll also have to transfer some of the funds to a third party while keeping what’s left.
Ron Strobel, a financial planner founder of Retire Sensibly, an investment advisor in Idaho, explains how scammers can pressure you to cash a fraudulent cashier’s check send funds:
“The scammer might create urgency by saying they accidentally sent too much money they need it back urgently for something important like paying their rent,” Strobel says.