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A cashier’s check is a bank check that looks like a typical check, except it’s drawn on the bank instead of a customer’s account. The cashier’s check is paid from funds from the financial institution’s account. As a result, cashier’s checks are considered guaranteed since they are not paid by the customer.
However, the customer provides the funds to buy a cashier’s check and typically pays a fee. In return, the bank debits the customer’s account for the amount and uses the funds to issue a cashier’s check drawn on the bank. Cashier’s checks are helpful when making large purchases between two parties that don’t know each other. Discover how cashier’s checks work and how to buy one.
Key Takeaways
- A cashier’s check is a bank check that looks like a typical check, except it’s drawn on the bank instead of a customer’s account.
- Since a cashier’s check is paid from funds from the financial institution’s account, it’s considered guaranteed.
- Cashier’s checks provide protection to the payee that personal checks do not, making cashier’s checks ideal for large payments, such as a down payment on a home.
- You can get a cashier’s check by visiting your bank branch or credit union or going to its website if it offers these checks online.
- If you don’t want to use a cashier’s check, other options include a money order, certified check, wire transfer, or social payment app.
When Do I Need a Cashier’s Check?
A cashier’s check is typically associated with a large payment when the payee—the person receiving the funds—wants reassurance that the check won’t bounce. For example, you might use a cashier’s check to:
- Make a down payment on a home
- Pay closing costs for a mortgage
- Buy a car or boat
- Purchase a piece of land
- Making a security deposit for a rental
- Paying a merchant or retailer that does not accept personal checks
In other words, a cashier’s check is not typically used for everyday purchases.
Enhanced Security
A cashier’s check provides a measure of security to everyone involved in the transaction. The payee knows the check won’t be returned because it’s being drawn from the bank’s account. Because cashier’s checks usually have watermarks and require signatures from one or more bank employees, the bank has the reassurance that the check won’t be counterfeited.
Also, the customer doesn’t have to worry about sharing your personal checking account information with the payee since the check is drawn on the bank.
Be aware of cashier’s check scams whereby the fraudster gives you a check that appears real and asks you to wire them money or send goods right away. Once you wire the money or send the requested goods, you find out the check was fraudulent.
Faster Clearing Time
Another advantage to the payee of using a cashier’s check is the funds are usually available by the next business day after the check was deposited. In contrast, with a large personal check, the bank might place a hold of several days to allow the check time to clear.
| Personal Check vs. Cashier’s Check | ||
|---|---|---|
| Personal Check | Cashier’s Check | |
| Guaranteed funds to payee | No | Yes |
| Funds withdrawn from customer | After the payee deposits the check, and it clears | Immediately when purchased |
| Check is drawn on | Customer’s account | The bank’s account |
| Ideal for large transactions | No | Yes |
| Convenient | Yes, write check and mail | No, must buy online or in person via branch |
Investopedia / Julie Bang
How and Where Do I Get a Cashier’s Check?
Three places to get a cashier’s check are a bank branch, a credit union, and online. Note that getting a cashier’s check online may take longer than obtaining one in person. Then, follow these steps to get a cashier’s check:
Review Requirements
Check the issuer’s requirements for providing a cashier’s check, including any limits. Banks may have cashier check limits, such as $250,000 per check or $500,000 daily.
Many banks and credit unions only issue cashier’s checks to customers. If the institution offers a cashier’s check to non-account holders, you’ll need to come with cash in hand to cover the check’s amount.
Gather Your Information
You’ll need the exact name of the payee—the business or person you are paying—and the precise amount of the check. You’ll also need a picture ID to verify your identity and any notes you want to include on the check regarding the payment.
See a Teller or Order the Check Online
A teller can supply you with a cashier’s check. Again, just be ready to show your ID and provide the payee’s name and the check amount. If you’re a current bank or credit union customer, you’ll need to specify to the teller the account from which the funds for the check should be drawn. (Be sure you have adequate funds to cover the check.) If you’re not a customer, you must pay the check amount in cash.
Your bank or credit union may also offer cashier’s checks online. If so, you log in to the website and select the account you’d like to use for the check. Depending on the institution’s menu navigation, ordering a cashier’s check online may be included under the “Order Checks” tab. Follow the menu prompts to add the payee’s name, address, amount, and any notes you want to include.
A cashier’s check purchased online might get routed to a bank or credit union branch where you pick it up. Cashier’s checks can also be mailed to the address on your account, which may take longer than picking it up in person and delivering it to the payee.
Get a Receipt
Get a paper or digital receipt for a cashier’s check to verify proof of payment. You may need it if the check is lost or stolen.
Take the Cashier’s Check to the Recipient
Because of the numerous hassles that would result from losing the cashier’s check, take the paper check directly to the recipient, if possible. Encourage the recipient to cash the check immediately, as cashier’s checks may expire earlier than personal checks depending on the institution or local laws. For example, while a personal check may be valid for up to six months, a cashier’s check could expire after 60 days.
A cashier’s check is written in the bank’s name rather than yours and signed by a teller, which means that the bank guarantees its payment.
How Much Does a Cashier’s Check Cost?
Most banks and credit unions charge a fee for cashier’s checks. The fees at some of the largest banks range from $6 to $15, although your bank may charge more or less than that. You may get a free cashier’s check if you have a premium checking, savings, or money market account at the bank.
If you order a cashier’s check online, the order could include expedited delivery and could run up to $20.
Alternatives to a Cashier’s Check
If you don’t want to write a personal check—and a payee won’t accept a cashier’s check—there are other options for making a payment to another party, including:
- Money orders: The less-expensive money order is a secure form of payment for a specific dollar amount and can be purchased at the post office, supermarkets, and some gas stations. However, money orders are for smaller amounts than cashier’s checks.
- Certified check: A certified check is like a cashier’s check in that the bank guarantees the check amount, but a certified check is drawn directly against your account and is less secure than a cashier’s check.
- Wire transfer: With a wire transfer, money is sent electronically—directly from your account to someone else’s—with no check required, but it can be more expensive than cashier’s checks, certified checks, or money orders.
- Social payment apps: P2P (peer-to-peer) apps may help you send money to friends or family using just someone’s email address or phone number and drawing from your bank account, debit card, credit card, or app balance.
Some payment apps limit how much you can send per day or in a single transaction. If you have a large amount to send, you may be better off using a cashier’s check or one of the other options mentioned above.
What If a Cashier’s Check Is Lost or Stolen?
If you purchase a cashier’s check and lose it, or it’s stolen, you can ask the bank to reissue the check. The caveat is that the bank may ask for an indemnity bond first. This bond isn’t easy to obtain and makes you liable if the lost check is found and presented for payment. It’s also not an instant process. Depending on the bank, you may have to wait 30 to 90 days to receive a replacement cashier’s check.
Can I Put a Stop Payment Order on a Cashier’s Check?
While you can easily put a stop payment order—or a formal cancellation request—on a personal check, you cannot do so with a cashier’s check. This is because the check draws on the bank’s funds, not your account, and must be honored.
Can I Use a Cashier’s Check Online?
Some banks allow cashier’s checks for less than a certain amount to be deposited using their mobile banking app. Other banks require that cashier’s checks be presented physically. Unlike an electronic check or e-check, you generally cannot spend a cashier’s check online to make purchases.
The Bottom Line
Cashier’s checks are often the payment of choice when buying a home or a car. Understanding how they work and where you can get one can help you decide if it’s the right way to pay. When you’re on the receiving end of a cashier’s check, take care to avoid fraud. Only accept a cashier’s check from someone you know, if possible, and give the check time to clear after depositing it into your bank account before using the funds.