What is a cashier's check?
A cashier's check is a type of payment issued by a bank. The bank guarantees the payment by withdrawing the specified amount from the payer's account and issuing a check to the payee. It's considered a secure form of payment, since the funds are issued directly by the bank.
What is a certified check?
A certified check is a personal check that has been verified and guaranteed by the issuing bank. The bank sets aside the check amount in the payer's account and provides a certification stamp indicating that the funds are available for the check to be honored.
Differences between a cashier's check and a certified check
The primary difference between a cashier's check and a certified check is the source of the guarantee.
A cashier's check is directly issued by the bank, with the bank's funds serving as the guarantee for the payment, making it exceptionally secure for large transactions. A certified check is a personal check drawn from the payer's account, which the bank verifies and earmarks funds for, providing a certification stamp to ensure its validity.
While both offer security, a cashier's check involves the bank's direct liability, whereas a certified check relies on the payer's available funds.
When should you use a cashier's check or a certified check?
Both certified and cashier’s checks are good options in situations when the recipient of a check wants assurance that the check will clear. Either check is commonly used for large amounts, or when a buyer and seller don’t know each other.
Where do you get a cashier's check or a certified check?
Banks issue both certified and cashier’s checks. Typically, the payer needs to visit a branch, but some online banks may offer cashier’s checks online or by phone.
Which is safer, a cashier’s check or a certified check?
Receiving a personal check as a payment doesn’t offer a concrete way of knowing whether the account it was written from has enough money in it to cover the amount, putting the recipient at risk of not getting the payment. With a certified check, that risk is mitigated because the bank has set aside the amount indicated. With a cashier’s check, it’s mitigated because the check is written from the bank’s account.
When a bank issues a certified check, it verifies the payer’s signature and ensures that the amount of the check is in the account and set aside for that check to clear. The bank adds a stamp, signature or other unique marking to show that a check is certified.
When the bank issues a cashier’s check, it gives the payee a check from its own account with the bank address, account number and phone number. People may attempt to pass fraudulent cashier’s checks. To make sure the cashier’s check is legitimate, look up the phone number of the bank referenced independently (rather than using the number on the check) and call them to confirm the check.
What is the cost of a cashier’s check and a certified check?
Some banks might not charge for certified checks, while some charge up to about $15. Cashier’s checks are typically in the $10 to $20 range.
What happens if a cashier’s check or a certified check are lost?
Unfortunately, the best advice is this: Don’t lose a cashier’s check or certified check. It’s not an easy fix.
If either are lost and need to be reissued, the bank requires the payer to get an indemnity bond. The bond ensures that the bank won’t be liable for paying the second check as well as the first. Indemnity bonds come from insurance companies, but they can be hard to get. Plus, banks might impose a 30–90-day waiting period before they write a replacement check.
If the payee loses a cashier's or certified check, the best course of action is to ask the payer to replace it. If that doesn’t work, the payee can also try to use an indemnity bond with the issuing bank.
