Cashier's Checks - Overview

Guaranteed, Bank-Issued Checks

Cashier’s checks are checks issued and guaranteed by banks. The bank or credit union prints a document with the name of the recipient (or payee) and the amount, and that document can be used for payment just like any other check. When compared to personal checks, a cashier’s check is a safer form of payment for sellers because the check cannot bounce.

Using Cashier’s Checks

Cashier’s checks are not the easiest form of payment for buyers or sellers, but they’re still popular.

Assuming the check is legitimate (more on that below), cashier’s checks are among the safest ways to receive payment. They’re commonly required when the seller needs certainty.

Guaranteed funds: when a bank prints a cashier’s check, the bank guarantees that the check will clear, and the funds will be drawn out of the bank's account. This provides security to the recipient (who is usually selling something). With a personal check, on the other hand, a check will only clear if the funds are available in the check writer’s account when the recipient tries to deposit or cash the check.

Quick availability: the recipient or seller can use money from a cashier’s check almost immediately after depositing the check. The first $5,000 generally must be made available within one business day (compared to the first $200 for personal checks). Banks are allowed to hold amounts above $5,000, but cashier’s checks usually clear much faster than personal checks.

How to Get a Cashier’s Check

To get a cashier's check, visit a bank or credit union – preferably one that you currently have an account at (start with the bank where you have your checking account). You’ll need the following:

  1. Identification to prove who you are – the bank might pull funds from your account, so bring a driver’s license, passport, or other valid ID
  1. Available funds in your account (most people use money from their account, but you can bring cash if you prefer)

Ask for a cashier's check, and provide any information the teller needs. Typically they'll want to know:

  • The amount of the check
  • Who the check should be payable to
  • Any "memo" or notes that you'd like to include on the check (an account or reference number, for example)

If you’re making the payment out of your account, the funds will be removed from your account immediately when the check is printed. Again, a cashier’s check is a form of guaranteed funds, so your money moves over to the bank’s account until the check gets cashed or deposited.

Fees: You may also have to pay a fee to get the check issued. If there's any charge, expect to pay $8 or so, but verify before you buy because every bank works differently.

If you don’t have a bank account: you can walk into any bank or credit union and ask for a cashier's check. However, some institutions will only issue checks for customers, so you might have to try several different locations (or open an account). You could also try a money order instead.

Credit union members: if you use a credit union, you can often get cashier's checks from almost any credit union location (not just your own credit union) with shared branching.

Bring ID and information about your “home” credit union, and call ahead to be sure the credit union you plan to visit offers cashier’s checks.

Online banks: some online banks provide cashier’s checks, but there’s obviously no bank branch to visit. Instead, you’ll usually need to request a check online, and the check will be sent to your verified mailing address. From there, you can forward the check to the payee (this process takes several days, so plan ahead).

Money Orders vs. Cashier's Checks

Money orders are similar to cashier's checks. They are considered "safe" forms of payment because they can only be purchased with cash (or cash-like instruments like a debit card or cash advance on a credit card). As a result, there's no wondering whether or not the money order will bounce. But money orders are not issued by banks.

Instead, they're available from post offices, retail stores, and money transfer businesses. Money orders also come with maximum issue limits, so they might not be useful for large items like home purchases. For more details, read about the differences between money orders and cashier's checks.

The Safety of Cashier’s Checks

If you're getting paid with a cashier's check, you may wonder how safe they really are. Traditionally these checks have been among the safest checks to accept because the promise to pay is made by the bank issuing the check – not the person who hands you the check. They are sometimes called bank drafts.

To dig deeper, compare a cashier’s check with a personal check. When you write a personal check, you’re supposed to have enough money in your account to cover the check. However, you may know that your check will be in the mail for a few days, that it will take the recipient a day or two to deposit the check, and that processing the deposit will take another few days. Therefore, your account won’t be debited for several business days after you write the check. If you don’t have the funds available today, you can always hope that they’ll be there when it really matters: when the check is presented to your bank for payment. So, you can write the check anyway, and you can probably walk away with merchandise in your hands. This practice is called floating checks (and it is illegal).

Unlike personal checks, cashier’s checks pull from your account when they are issued. This means, of course, that you can’t get a cashier’s check unless you actually have sufficient funds in the account or you bring cash to the bank. Once the check is issued, the bank is responsible for paying the payee, and it's difficult to cancel the check.

As a merchant, which would you rather get – a cashier’s check or a personal check? Of course, your odds of being paid are better with a legitimate cashier’s check.

Uncertain Payee

There may be times when you don't know who to make a cashier's check payable to. In those cases, you may need some extra creativity or patience. It's very unlikely that the bank will issue a cashier's check with the payee name left blank, and the same goes for getting the check made payable to "Cash." Once a cashier's check is issued, the bank is responsible for it, and most banks are unwilling to hand out blank checks.

Cashier's Check Scams

Unfortunately, not all cashier's checks are legitimate. They are regularly used in scams because sellers assume they're 100% safe. A typical scam involves somebody sending you a cashier's check and asking you to do something with that money (if they want you to do anything besides keep it, watch out). Unfortunately, your bank will let you withdraw money even if a check is bad (it just has to be a convincing fake). Typically, you’ll send money to a thief, and you'll have no recourse except to try and find the individual yourself – which isn’t easy. For full details, read How Cashier’s Check Fraud Works.

As a result of these scams, some banks are reluctant to cash cashier's checks. Federal regulations allow banks to place a hold on amounts above $5,000 (and banks can refuse to honor a check altogether if there is any reason to believe it's fake).

When are Cashier’s Checks Used?

Because of their relative safety, cashier’s checks are typically used for high-dollar transactions and transactions between people (or businesses) that don't know each other. Instead of hoping that your buyer has funds available in their checking account, you can be more confident that a bank has enough cash on hand to pay what you need.

Cashier’s checks are also used in transactions where the money needs to settle quickly.

When you deposit a check, you might see the money in your account, but you can't withdraw all of that money until the bank "clears" the deposit (with personal checks that might take several weeks, but with cashier's checks and government-issued checks the funds are typically available immediately). In a real estate transaction, nobody wants to wait for processing on a personal check – again it’s a significant asset being sold – so down payments are often made with a cashier's check or wire transfer. Likewise, brokerage firms may require settled funds for certain transactions, and cashier’s checks can be used there also.