A cashier’s check (UK: cashier’s cheque) is a check guaranteed by a bank. It is signed by the cashier and drawn on the bank’s own funds, rather than the purchaser’s funds. Also known as a banker’s draft, treasurer’s check, teller’s check, bank check, or banker’s check.
The word is spelled ‘check’ in the USA and ‘cheque’ in other native-English speaking nations.
A cashier’s check is normally used when the receiver of funds requires a total guarantee, as may occur in some real estate and brokerage transactions.
Beware of counterfeit cashier’s checks – there are many scams on the Internet. That ‘total guarantee’ only applies if it is a legitimate document. (Image of Check: Wikimedia)
How to get a cashier’s check
You simply go to your bank and ask for a cashier’s check, stating how much it is for. The amount will be debited from your account, after which the bank assumes responsibility for making sure it clears.
This procedure contrasts with a personal check, where the amount will not be debited from your account until the check is deposited or cashed by the recipient.
A cashier’s check is usually cleared one day after it is deposited into a bank account. However, most bank managers will allow you to draw money beforehand if you ask, because they are sure the check will clear.
A cashier’s check is not certified check or money order
A certified check is a personal check – it is called ‘certified’ because the bank confirms the signature on it is of the account holder and that he or she has sufficient funds to cover the amount stated on the check.
A money order is a more trusted method of payment than a personal check, but is not recognized as ‘guaranteed funds’ in the United States, and the amount is limited to $1,000 (postal money orders).
Most American insurance and brokerage firms will no longer accept money orders as payment for deposits into brokerage accounts or insurance premiums because of regulatory requirements with the Patriot Act and the Bank Secrecy Act.
Bank drafts – Cashier’s checks – Certified Checks
Certified checks, cashier’s checks and bank drafts are all different kinds of bank checks that are considered safer than personal checks – however, they are not the same.
Cashier’s Check: signed and guaranteed by the financial institution (bank) – the funds come from the institution itself and not the purchaser’s bank account. It is considered the most secure of these three options.
Certified Check: a personal check which the bank certifies. It is signed by the customer, and the bank certifies that there are enough funds in the customer’s account for the check to clear. The bank also confirms that the signature is genuine.
Bank Draft: very similar to a certified check, but in this case the bank sets aside the funds until the document is used.
Beware of scams
Counterfeit cashier’s checks are becoming more common in Internet transaction. The seller receives the fake cashier’s check, which the bank does not automatically detect as being counterfeit until ten days after it has been deposited.
The bank will credit the customer’s account the next day, and then withdraw the funds when it discovers it is bogus.
eBay says you should ask the bank teller to call in the routing numbers on the cashier’s check. “It is fast and easy, there is a national registry of bank phone numbers. If you just deposit the check, the bank will not question it’s validity, and it will take days or weeks to discover it was phony. You will be responsible for all the bank charges incurred, and overdrafts if you started spending it.”
According to the Merriam-Webster Dictionary, a cashier’s check is:
“A check that is written by a bank and signed by a cashier,” or “A check drawn by a bank on its own funds and signed by the cashier.”
Video – Cashier’s check scam
This Portland Federa Credit Union video explains how to avoid fake cashier’s check scams.