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What is a cashier’s check?

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    A bounced check is a real headache for both the payer and the payee. That’s where cashier’s checks may help. Unlike ordinary checks, a cashier’s check is backed by the funds of the financial institution issuing it, rather than the payee. This makes cashier’s checks unlikely to bounce. For this reason, some important transactions might call for cashier’s checks instead of personal checks.

    So, what is a cashier’s check? Cashier’s checks, a.k.a. official checks, come with added layers of security that can help make payments safer and more reliable than ordinary personal checks. Each cashier’s check is signed by one or more official bank employees and may include extra security features like additional watermarking. Plus, it has the defining feature of being backed by bank funds instead of personal funds. This provides assurance to the recipient that the funds are ready and waiting for them.

    When to use a cashier’s check

    The added security features of a cashier’s check make it well-suited for high-value transactions. For things like down payments on mortgages, vehicles or capital equipment, cashier’s checks are generally preferred — and sometimes required.

    How long does a cashier’s check take to clear?

    Cashier’s checks tend to process faster than ordinary checks. But exactly how long do cashier’s checks take to clear? Funds for cashier’s checks deposited in-person can be available as soon as the next business day — though this varies by circumstance and financial institution.

    What if I lose a cashier’s check?

    Losing a cashier’s check isn’t the end of the world, but it can present a significant speedbump for your transaction. Taking extra care when handling and transporting a cashier’s check can help save you from a headache. In the case of a lost, damaged or stolen cashier’s check, you can ask your bank to reissue the check.

    However, they may ask you for an indemnity bond first. This is essentially an insurance policy for the bank’s funds behind the check. You may also be charged a fee to cancel the previous check. Additionally, the bank may require several weeks or months before re-issuance to ensure the missing check isn’t deposited in the meantime. For time-sensitive transactions, it may help to be extra-cautious with cashier’s checks.

    How to get a cashier’s check

    Traditionally, cashier’s checks are obtained from a bank or credit union you hold accounts with. But do cashier’s checks cost money? Typically, yes. Cashier’s checks may cost a small fee, though some financial institutions sometimes make several cashier’s checks available to certain account holders for free within select time periods.

    Before the bank backs a check with its own money, the customer pays the bank from their account. With this, the customer has assured the availability of funds to the bank, which in turn allows the bank to guarantee payment to the payee. This is also why many financial institutions only sell cashier’s checks to account holders. Some banks and credit unions, however, will let you purchase a cashier’s check even if you don’t hold an account with them. Reaching out to local institutions about their cashier’s check policy can help you discover available options.

    A straightforward way of getting a cashier’s check is by going to your bank and purchasing one directly. Calling ahead and asking about your bank’s requirements may help avoid delays in making your transaction. Common things to keep on hand for most banks and credit unions are:

    • The name of the person or business you’re looking to pay
    • The exact amount you’re paying
    • A government-approved photo ID
    • The account you’d like the cashier’s check’s funds drawn from
    • Any specifications you want on the cashier’s check regarding what the payment is for

    Online cashier’s checks

    In recent years, more financial institutions have made cashier’s checks available through their online portals. Ordering cashier’s checks online typically requires an account with the institution and may carry the added costs of postage and delivery fees. This method is well-suited for customers reluctant to go to their bank in person and for whom a few days’ wait is feasible — though it does present some level of risk that the cashier’s check may get lost or damaged in transit.

    Alternatives to cashier’s checks

    While cashier’s checks offer unique benefits, other payment methods may be equally suitable for certain transactions. Let’s look at some cashier’s check alternatives and their respective advantages and disadvantages.

    Money orders

    Money orders are a popular alternative to standard checks, though they may not always fit the bill for especially large purchases. Money orders lack the backing of a bank’s funds but are pre-paid by the sender, offering a similar level of confidence and security to the recipient.

    Their chief advantage is that money orders are easy to get — you don’t need a bank account and they can be purchased at many financial institutions, post offices and even some supermarkets and gas stations. Some providers, however, place an upper limit on money orders. The United States Postal Service post office, for example, maintains a $1,000 limit on money orders.

    Certified checks

    Certified checks are something like a halfway point between a cashier’s check and a personal check. They are signed off by bank employees, but the funds are drawn from the sender’s account — not the bank’s. The signatures only certify that the sender’s account has adequate funds at the time of writing the check. However, certified checks can bounce. They also may have fewer added securities, like the extra watermarking common to cashier’s checks.

    Wire transfers

    A wire transfer is a popular and generally secure way of sending money electronically. They typically cost more than certified checks or money orders, however they often have higher limits than the latter. The primary downside to wire transfers is cost. Wire transfers are typically more expensive than the previous methods. Some providers may carry out nonbank wire transfers, making high-value transactions available to those without bank accounts.

    P2P payment apps

    Peer-to-Peer (P2P) payment apps have steadily grown in popularity in recent years. Their chief advantages are speed and cost; P2P transfers are often instantaneous and low-cost. Many apps, however, maintain lower transaction amount limits per transfer or per day. This makes P2P transfers more suited for high-frequency, low-volume transactions than for major payments like mortgage closings or capital purchases (where cashier’s checks are routinely required).

    In summary

    Cashier’s checks are bank-backed checks that are virtually assured to clear, since they draw funds from the issuing institution rather than the payer’s account. They cost money and are typically sold by the bank only to existing customers. If you’ve been asked for one and need to know where to get a cashier’s check without a bank account, keep in mind that some banks and credit unions sometimes offer cashier’s checks to non-account holders. Calling local financial institutions and inquiring about how to get a cashier’s check from them may be your best bet. Alternatively, if you need to make a simple payment, some cashier’s check alternatives like money orders or wire transfers might be viable for certain transactions.

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