What Is a Cashier's Check?

Cashier's Checks Explained

convenient and common uses for cashier's checks

The Balance / Julie Bang

Cashier’s checks are checks that banks issue and guarantee. Your bank or credit union prints a document with the name of the payee and the amount. The recipient uses that check to collect funds from your bank when they cash it at theirs.

What Is a Cashier's Check?

A cashier's check is more secure for the recipient than a personal check. That's because there must be enough money in the account to guarantee it before a bank will issue it. This makes it unlikely to bounce.

Because of their relative security, cashier’s checks are typically used for high-dollar transactions and payments between entities that don't know each other. Instead of hoping that your buyer has funds available in their checking account, you can be reasonably confident that a bank has enough cash on hand to pay.

Alternate names: Bank drafts, bank check, teller's check

How Does a Cashier's Check Work?

Banks and credit unions have the money in hand before printing a cashier’s check. The bank immediately withdraws this money from the customer’s account. It sets this money aside and, as a result, can guarantee the check will clear. The bank prints out a check payable only to the entity with whom you are conducting a transaction and gives it to you.

This provides security for the recipient, who is often selling something, such as a used car. A personal check, on the other hand, will only clear if the funds are available in the checkwriter’s account when the recipient tries to deposit or cash the check.

After depositing a cashier’s check, the recipient can use the funds almost immediately. The first $5,525 typically must be made available within one business day. Banks are still allowed to hold amounts above $5,525, or any amount they suspect might be problematic, but cashier’s checks usually clear much faster than personal checks.

Cashier’s checks work well for transactions where you need the funds to be settled 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. Personal checks might take several days or weeks, but cashier's checks typically make the funds available within one business day.

Do I Need a Cashier's Check? 

You can use a cashier's check in real estate down payment transactions because they are typically such large amounts of money. Likewise, brokerage firms may require settled funds for certain transactions, and you might be able to use a cashier’s check with them as well.

You can also accept a cashier's check if you're privately selling something with a large price tag. Meet the person at the bank and conduct the transaction there for extra security.

Alternatives to Cashier's Checks

Money orders are similar to cashier's checks. They are considered "safe" forms of payment because you can only purchase them with cash (or cash-like instruments such as a debit card or cash advance on a credit card). As a result, they shouldn’t bounce (or be returned unpaid) like personal checks.

But money orders originate from different issuers. In addition to banks and credit unions, you can also buy money orders at post offices, retail stores, and money transfer businesses.

A wire transfer is another way you can pay for something. Wire transfers use secure electronic messaging through the banking system to move funds from your bank account to someone else's.

Money orders come with maximum issue limits, so they may only be adequate for smaller payments.

You could also use Western Union if you need to get funds to someone quickly without using the banking system.

How Much Does a Cashier's Check Cost?

Expect to pay anywhere between $5 and $15 for a cashier's check. The cost depends upon the bank you use and whether you have an account or not. Many financial institutions include cashier's checks in their account memberships, while others might charge account holders a small fee.

If you don't have an account at the bank you're getting a cashier's check from, you'll need to be able to pay the face value of the check and the fees at the time of purchase.

Pros and Cons of Cashier's Checks

Pros
  • Guaranteed payment

  • Fund availability

  • Creates a money trail

Cons
  • Easy to counterfeit

  • Funds might be available too quickly

  • Extra costs

Pros Explained

  • Guaranteed Payment: The bank that issues your cashier's check will transfer money from your account to theirs if you bank with them. If you don't, it will require you to pay the amount you're asking the check to be. This makes the check more reliable for the recipient since they know the funds are in the bank.
  • Fund Availability: The funds from a cashier's check are usually available overnight if it is less than $5,525 and you make the deposit in person. There are some circumstances where you might not be able to access the funds the next day. For instance, if you deposit the check on a Friday, the funds do not have to be made available until Monday. If you deposited them on Thursday, they should be accessible on Friday unless there is a hold for some reason.
  • Creates a Money Trail: When you use a cashier's check, the bank records the amount and check information. The receiving bank does the same, which creates a paper trail that can be followed if a problem appears.

Cons Explained

  • Easy to counterfeit: While cashier's checks are among the most secure payment methods, they can still be used in counterfeiting and scam operations to steal money from people who rely on their security.
  • Funds available too quickly: While it's nice to access the funds the day after you cash a check, this quick access can cause problems if you withdraw the money the next day. The bank might find that the check was fraudulent a few days later and ask you to pay the money back. In this case, you will have lost whatever someone "paid" for, and you'll owe the bank money.
  • Extra costs: Cashier's checks cost money. It might only be $5 or $10, but it's still money you might have used for something else.

How to Get a Cashier's Check

Ask your bank about the requirements for ordering a check. You typically need cleared funds available in your account, or you need to deliver cash to the bank. You can walk into most brick-and-mortar banks to get a check issued.

Within a few minutes, you should have a check in hand, and you can pay the recipient immediately. Some financial institutions may only issue cashier's checks to account holders, so you may need to call around and ask banks about the requirements.

Some banks—particularly online banks—allow you to request cashier’s checks online. The bank might only mail checks to your verified mailing address, so you need to wait for the check and then forward it to the person you're paying.

If you bank at a credit union, you can often obtain cashier's checks from almost any credit union location nationwide (not just your credit union) with shared branching. Bring your ID and account information with you. Call ahead to be sure the credit union you plan to visit offers cashier’s checks.

You can walk into any bank or credit union and ask for a cashier's check. However, some institutions only issue checks for customers, so you may have to try several different locations (or open an account).

Key Takeaways

Key Takeaways

  • A cashier's check is a check issued by a bank and is guaranteed to have the funds available.
  • Cashier's checks are suitable for high-dollar transactions such as real estate or other large purchases.
  • You can use money orders or wire transfers in place of cashier's checks.
  • Some banks and credit unions provide cashier's checks as a service to members, sometimes with a fee. Non-members might be able to have a check issued also.