A cashier’s check is an alternative payment method that’s often favored over cash, online payments or personal checks in riskier transactions. This method is particularly useful when it comes to making large payments because it offers a degree of protection on both sides and can improve a buyer’s credibility.
How does a cashier’s check work?
A cashier’s check works similarly to a personal check, but the funds come directly from the bank rather than the individual’s account. This provides a more secure method of payment for both the buyer and seller as the buyer is guaranteed payment while the seller doesn’t put their own money at risk in the event that the buyer defaults. These types of checks are often deployed in cases of large purchases such as houses or cars, particularly given that debit cards will often not be accepted, and the amount concerned cannot reasonably be covered in cash.
A cashier’s check will be signed by a bank cashier – or sometimes two – and will also feature the bank’s watermark to ensure its authenticity. They’re purchased directly from the bank, which means you’ll pay the bank first and the bank will then pay your seller.
Cashier’s check vs. certified check
A certified check may sound like an official document, but it is essentially another name for a personal check. With a certified check, the money concerned is drawn directly from the check-writer’s account. With a cashier’s check, the money comes from the bank’s own funds – although the buyer will have paid the bank the appropriate amount ahead of time. Cashier’s checks may also be referred to as “official checks,” but these terms mean the same thing.
How to get a cashier’s check
A cashier’s check can be obtained directly from your bank simply by visiting a branch. You can sometimes request these checks online but it’s always worth checking with the customer service team whether the option is available. This may depend on the type of account you hold and the amount you wish the check to be made out for.
You’ll need to supply the details of the recipient and the amount you wish to pay out as well as your own payment methods and your ID. You’ll typically have to pay a commission amount as well as the cost of the actual check so it’s worth enquiring about rates beforehand.
Once you’ve purchased your check, you should get a receipt that you can use as proof of payment. You can also use this to track the check, so that you know when the payment has been made, and to keep your records up to date.
How much is a cashier’s check?
Many financial institutions will charge a service fee for a cashier’s check, but actual rates can vary significantly between banks, so it’s worth looking around to see what the best deal is. Some will offer a free service, but this is often limited to those holding particular types of accounts. Others will offer a certain number of free checks within a set period before you have to pay a fee for any extras. Fees are usually fairly low but it’s important to enquire ahead of time so you can factor the cost into any calculations.
Cashier’s check limits
Typically, there’s no limit on the amount that can be paid out using a cashier’s check – although this does sometimes vary between different institutions so it’s always worth enquiring with your bank. If you’re paying a particularly high amount, the bank may require that you order the check in person or you may have to make the payment across separate checks or even different days.
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