If you’re making a large purchase, such as a down payment on a home, you might need a cashier’s check. A cashier’s check is issued and guaranteed by your bank, meaning it’s paid by the bank’s funds and not your own. But the bank will only give you a check if you have the cash to back it up.
The bank’s guarantee removes worries about the check clearing, making this method a more reliable way to pay than a personal check.
Here’s a closer look at cashier’s checks, including how you can get one and whether they are safe.
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How to get a cashier’s check
Here are the steps you’ll follow to get a cashier’s check at a bank branch:
1. Check that you have the funds available: The amount that you need for the cashier’s check will be taken out of your account. If you don’t have an account at the bank, you may bring cash to cover the amount.
2. Gather the recipient’s information: You’ll need the name of the person or business you’re paying and the exact dollar amount. Some banks have specific requirements, so call ahead to make sure you don’t run into any delays with your transaction. You’ll likely need to bring a government-approved photo ID and some banks charge a fee of $10 or $15 for a cashier’s check, but may waive it.
3. Visit your bank or credit union: You may need to open an account at the financial institution before you can get a check. You’ll need to pay the check amount plus any fee. When you get the cashier’s check, verify the information is correct before you leave the bank.
4. Ask for a receipt: This can be helpful if you need to track the check or it goes missing.
Pros and cons of cashier’s checks
Pros:
- Guaranteed by the issuer
- Typically clear quickly
- Safe way to make large payments
Cons:
- Vulnerable to fraud, forgery or counterfeiting
- Can come with fees
- May need to visit bank or open account
Personal checks vs. cashier’s checks
Personal checks and cashier’s checks are similar to each other. Both are slips of paper that represent money for you to use as payment. You’ll also want to know the key differences.
A personal check is written and signed by you and linked to a personal checking account. A personal check taps funds from that account.
A cashier’s check, on the other hand, is written and signed by the bank, and it is paid directly from the bank’s funds rather than your own. You debit the amount of the transaction to the bank when the check is drafted, and the bank guarantees it.
Cashier’s checks have more security features, such as a watermark and a signature from at least one bank employee. They tend to be a better option for large transactions.
However, a cashier’s check requires a little extra work: You’ll needto request one at your bank or online. Paying with a personal check may be easier because you can write the check yourself without a bank or a fee.
How to safeguard against cashier’s check fraud
Check fraud usually takes place in two ways: when someone steals your check and uses it fraudulently, or when someone is tricked into depositing a fake check. You’ll also need to watch out for phishing scams as well as mailbox and identity theft.
“Safeguarding against cashier’s check fraud is crucial,” said Ashley Akins, CPA, senior tax associate and contributor at MakeGood, an accounts receivable management platform. “If you want to avoid scams, it’s essential to know the sender and verify the check’s genuineness with the issuing bank.”
Here are a few ways you can watch out for check fraud, according to the Federal Deposit Insurance Corp:
- Make sure the bank is legit. A fake bank name means you’ve probably got a fake check.
- Check with the issuing bank. Use the phone number on the bank’s website and not the check.
- Be wary of checks from someone you don’t know. A check with a grammar or spelling error is another warning sign of a scam.
- Review the check amount. Fake checks are often made out for more than the agreed-upon amount.
- Compare the check’s postmark with the bank’s location. If the two are not in the same city, the check could be a fake.
- Look for official watermarks and other security features. Fake watermarks will be poorly executed.
Don’t deposit a check unless you know it’s real. When you deposit a cashier’s check, the law may require your bank to make the funds available within a specific time frame — even if the check hasn’t cleared yet. If you spend that money and the check turns out to be fake, you may struggle to pay it back.
“My advice is to confirm that the check has cleared before using the funds, and keep all associated documents for reference,” Akins continued.
Frequently asked questions (FAQs)
It depends on the financial institution — some never expire, while others are considered out-of-date after so many days. The cashier’s check may say somewhere on it how many days you have to cash it.
You usually can’t reverse a cashier’s check after it’s issued because the funds come from the bank, not your personal account. If your check is lost or stolen, contact the bank immediately.
You will need the name of the person or business you’re paying and the payment amount for the cashier’s check. You’ll also likely need a government-approved photo ID, such as a driver’s license.
Most credit unions and banks, whether traditional or online, issue cashier’s checks, but they often require you to have an account.
Contact the bank as soon as possible to learn the next steps. Usually, you can’t stop the payment and will have to purchase an indemnity bond. It’s a type of insurance policy releasing the bank from liability if your check is found and presented for payment.
