What's a cashier's check and how do you use it?

When a personal check just won’t cut it

These days, it can be easy to do most of your banking virtually on the fly. Glance at your phone and get your balance. Crack open your laptop and you’re transferring cash in minutes.

But even in this highly digital world, a simple piece of paper is sometimes still needed. Designed for large purchases, a cashier’s check is a way to give or receive funds when a little extra security is called for.

Say you find your dream car, take it for a spin and are soon ready to buy. You reach for a personal check, but the seller kindly asks for guaranteed funds, such as a cashier’s check.

So stop wondering, "What’s a cashier’s check?" You can get up to speed on the hows, whys and how-to-buys of this handy money transfer option right here.

How does a cashier’s check work?

A cashier’s check is guaranteed by the bank or credit union that issues it.1 Unlike personal checks, which can bounce if there aren’t enough funds in the account to cover it, cashier’s checks are only issued if there’s cash in your account to back it up.

This is why cashier’s checks are sometimes preferred for large purchases. If you rent a new apartment, the landlord might ask for a deposit in the form of a cashier’s check. Making a down payment on a home may also call for a cashier’s check. And, naturally, a seller who’s getting ready to hand you some car keys may request a cashier’s check so there’s no risk of anything bouncing after you’ve driven away.

How and where to get a cashier’s check

You can head to your local bank and explain to the teller that you need a cashier’s check and what you are going to use it for.

The teller will check that you have the funds to cover the amount. If you have a checking account at the bank, the amount you need for the cashier’s check will be taken out of your account.1 If you don’t have an account at the bank, just bring the cash needed to cover the amount of the check.

The bank will then give you a cashier’s check with the name of the bank, the person or business you’re paying, and the amount printed on it.

Some banks allow you to order cashier’s checks online. If you do this, remember that it may take a few days for the check to arrive in the mail.

And the cost? Most cashier’s checks cost around $10 or $15, but some banks may waive the fees in some situations.1

Money orders vs. certified checks vs. cashier’s checks

A cashier’s check is just one way to give or receive guaranteed funds. If you’re not sure if this is the right choice for your needs, here’s a comparison of three common payment options:

Money orders can be purchased in many convenient locations, from gas stations and grocery stores to banks and credit unions. The clerk will take your cash (say, $800 to cover your rent) plus the fee that the store charges (say, $1.50). In this case, you’d end up paying $801.50 and your landlord will receive a payment that’s guaranteed.

Money order fees can range, depending on their amount and whom you buy them from. The U.S. Postal Service charges anywhere from 50 cents to $1.95.2 And while they’re fairly affordable and easy to get, they may be capped at $1,000.3 So if you need to pay for something that costs $3,000, you’d have to purchase three separate money orders (and pay three separate fees).

Certified checks are verified by your bank, basically letting the recipient know that you have enough funds in your account to cover the amount of the check.4

Cashier’s checks are also verified by your bank. In this case, the money is technically coming out of the bank’s funds, not your account.1

When it comes to a cashier’s check vs. a certified check, the differences are minor. Both can be used to transfer large amounts of money. And whichever you choose, the payee will have some peace of mind knowing that the funds are guaranteed.

Are cashier’s checks safe?

Unfortunately, anything from checks to cold hard currency can be counterfeit––in other words "fake." So if you’re the one cashing a cashier’s check, never hesitate to have your bank look it over to make sure everything’s on the up and up.

As to whether a cashier's check can be canceled, the answer is yes, but it may take some work. So, it’s good to be as careful as possible when handling checks of any sort. If you simply change your mind and don’t need the cashier’s check anymore, your bank can explain how to get that money back in your account. But what happens if a cashier's check is lost or stolen? You’ll be required to fill out forms and possibly wait 90 days for the bank to resolve your issue.5

The next time you need to make a big purchase–like some shiny new wheels–you’ll know whether a cashier’s check may fit the bill. And you’ll know how to safeguard yourself if someone offers to pay you this way.

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