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Personal Finance

How Do Certified Checks Work?

A certified check is a type of official bank check that's gone through a verification and certification process. They can be a convenient and secure way to transfer significant amounts of money, and often are one of the few options accepted when you're buying a car, putting a down payment on a home or making a significant purchase.

With a certified check, you don't have to worry about carrying a large amount of cash, and the seller can be confident your check won't bounce.

How Does a Certified Check Work?

In many ways, a certified check works like a regular check. You write the check, use it to pay someone else, and the money gets withdrawn from your connected checking account when they deposit it.

The difference is a bank or credit union will certify the check after verifying your identity, making sure there's enough money in your account, freezing the funds and then signing or stamping the check to mark that it's certified.

Generally, you'll need to visit your bank or credit union branch with your check filled out to get it certified. There also may be a nominal fee, such as $2 to $5, per certification. But call your branch ahead of time to see if it certifies checks and to inquire about fees.

Although a certified check can help protect against fraud and bounced checks, if you're accepting the payment, know that scammers can create fake certified checks that look authentic. Your bank may accept the check and release the funds into your account, but then realize it's a fake and take the money back out of your account. Ultimately, it's your responsibility to make the account whole even if it was an honest mistake and you thought the check was real.

To protect yourself from fraud, you may want to avoid accepting certified checks (along with cashier's checks and money orders) and use a well-known online payment or escrow service instead. If you're considering accepting a certified or cashier's check, look up the issuing bank's phone number and call to verify the account and check is legitimate before proceeding.

Is a Certified Check the Same as a Cashier's Check?

Certified checks and cashier's checks are both types of official bank checks. The main difference is that with a cashier's check, you pay the bank or credit union upfront and it guarantees the check will clear. In contrast, a certified check is a personal check you guarantee, putting the onus on you.

Both certified and cashier's checks give sellers a higher level of security versus a regular personal check. Of the two, however, a cashier's check may be safer because a financial institution backs it, so some sellers may require a cashier's check rather than a certified check.

What Is a Certified Check Used For?

Certified checks are generally used for significant transactions when the seller doesn't want to or can't accept other forms of payment.

For example, you might have to use a certified or cashier's check to make a down payment on a car if the seller doesn't want to pay card processing fees or handle large amounts of cash. Or, you may need a certified check for a security deposit when you move into a new home. Similarly, a certified or cashier's check could be the best option when making a down payment on a mortgage.

Because they offer more security than personal checks, a certified check could also be an option for smaller, informal purchases—such as when you buy something via Facebook Marketplace or Craigslist. But be wary of the many scams that can go hand-in-hand with online marketplaces.

What Are Other Alternatives to a Certified Check?

A certified or cashier's check isn't the only way to securely transfer money, and some of the alternatives may be better suited for certain situations:

  • Money orders: A money order is similar to an official check, but there's often a limit (such as $1,000), and you can buy money orders from a post office, retail store or supermarket in addition to banks. You'll have to specify the recipient when you purchase the money order and pay a small fee in addition to the money order's amount. It could be a good alternative to an official check if you don't have a checking account or would otherwise have to pay high fees for an official check.
  • Bank transfers: You may be able to directly transfer money from one bank account to another with an electronic transfer using the automated clearing house network. These transfers often take several days, and may be free or cost the person initiating the transfer several dollars.
  • Wire transfers: A wire transfer is another option if you want to move money between two accounts. The wire transfer is often quicker than an electronic bank transfer, but there may be higher fees. Also, some banks charge fees to both send and receive wire transfers.
  • Money-transfer apps: You could use a third-party payment service, such as PayPal, Venmo (owned by Paypal) or Zelle. You can often use these to make quick and secure transfers to friends or trusted companies for free.

While you can use many secure forms of payment to send or receive money, always be on the lookout for scams. These can range from fake certified checks to complex schemes that play out over several days, weeks or months. Electronic services aren't immune either, as transactions can be reversed, and money can be taken out of your account.

Staying Safe With Payments

Avoiding scams is an ongoing task. When you're selling something, be cautious about the types of payments you accept. While official checks, money orders and transfers all can be secure, fraudsters also use all sorts of methods to steal money. You can look online for reports of scams involving similar circumstances before handing over or shipping anything. And if you're meeting in person, only agree to meet at a public and secure location—such as a bank or police station.

Similarly, when you're buying a product or service, do due diligence if you're unfamiliar with the seller. Particularly when buying through online marketplaces, be wary of buyers who "accidentally" give you too much money and ask you to send back the difference. It's a common scam as the initial, large payment gets reversed and you're left without that money or the money you sent.

Whenever possible, using a credit card can be a safe option because you can dispute a transaction and initiate a chargeback to get your money back if the seller doesn't give you the promised product or service. You can also earn rewards and receive cardholder benefits, such as extended warranties on eligible purchases, with the right card. Using Experian CreditMatchTM, you'll receive personalized card recommendations based on your credit.


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