What Is a Cashier’s Check?

What Is a Cashier's Check?

A cashier's check is a way to make a payment that comes with a guarantee from the bank that the funds will be available when it's cashed. Here's how it works:

1. You pay for the cashier's check in the amount you want to send to the recipient.
2. The bank deposits that money in an account it controls.
3. The bank issues the check, and a representative from the institution signs it.
4. When the recipient deposits the check, the funds are drawn directly from the bank itself.

Cashier's checks are more secure than both personal checks and certified checks. However, they can be more cumbersome to manage if they're lost or stolen. That's because it's generally not possible for you to stop payment on a cashier's check, since the funds come from the bank and not from your own account. Instead, the bank can stop payment on the check under certain circumstances, and it will likely have a lengthy process for you to comply with to replace the check.

When to Use a Cashier's Check

Since cashier's checks are a safe, verified way to make a payment, they're often the go-to payment method for large or high-stakes purchases. Circumstances when it's recommended, or you'll be required, to use a cashier's check can include:

• When you're buying a home: You'll typically need to provide either a cashier's check or proof of a wire transfer for the amount required to close on a home purchase. That's because these transactions are for big amounts, which aren't safe to carry around in cash, and the buyer wants reassurance the check will clear. The amount will be listed on your loan estimate and closing disclosure.
• When you don't know the seller well: Using a cashier's check gives the seller security that the payment will go through, which may be helpful when, for example, you're buying a used car.
• When you need the funds to clear quickly: Cashier's checks can clear as quickly as overnight. Your landlord may require a cashier's check when you make a security deposit on a rental apartment, which can help you secure the apartment fast.

How Much Does a Cashier's Check Cost?

Cashier's check fees vary by institution. Some banks offer a certain number of cashier's checks for free to account holders. If they charge a fee, banks and credit unions typically charge $5 to $20 per check. They may also charge a delivery fee if you order the cashier's check online and ask for it to be delivered within the U.S.

You can ask the bank how much it charges or find your institution's fees in the bank's online rate and fee schedule. Look specifically for the fees charged for the account you currently hold at the institution.

How to Get a Cashier's Check

Here are the steps to take to get a cashier's check:

1. Choose a bank or credit union. You can get a cashier's check at the institution where you have a checking account, and sometimes also at a local bank or credit union where you don't have an account. If your bank offers free cashier's checks, that may be your best bet.
2. Check your account balance or bring cash or your debit card. If you're getting a cashier's check from a bank or credit union where you don't have an account, bring cash for the amount of the check. This negates some of the security of using a cashier's check, however, so it's likely wise to stick with your own institution if possible. Go to the bank in person or order a cashier's check online; at this point, the bank will confirm you have the funds in your account to pay for the check.
3. Pay the fee and provide payee information. Pay the cashier's check fee, and give the bank the payee's name or business name and the check amount so that the bank can cut the check from its own funds. You'll likely need to show your government-issued photo ID.
4. Receive the check or get it delivered. You'll then have a cashier's check, signed by the bank, that you can take with you to the payee. You can also have it delivered if you've ordered it online through your bank. However, this means that the cashier's check may take several days to arrive, will likely require an additional delivery fee and runs the risk that it gets lost in the mail.

Learn more: How to Choose a Bank Account

Cashier's Check vs. Certified Check vs. Money Order

Certified checks and money orders are additional methods of payment that are more secure than a personal check.

A certified check is less safe for the payee than a cashier's check, as it's guaranteed not by the bank but by you, the account owner. It is essentially a personal check with extra layers of security because the bank places a hold for the check amount on your account, confirming it will clear. The bank also verifies your signature and provides an official stamp on the check that reads "certified" or "accepted." Both you and the bank's representative sign it.

A money order is a prepaid method of sending money that isn't connected to a financial institution. You can buy a money order with cash, which means you don't need to have an account at a certain bank or credit union, or at all. Limits on money orders are usually around $1,000, so they're best for smaller transactions. You can get a money order at post offices, retail stores, banks and credit unions.

Here's how these three options compare:

For large transactions, a cashier's check will generally be the best choice. If the cost of a cashier's check is prohibitive and a certified check is accepted for the transaction, certified checks are an alternative—they're less secure, however, since they're still a personal check. Money orders are a solid option for purchases or transfers under $1,000, since they're low-cost and still secure, though they may not have the full guarantee of a bank behind them like cashier's checks.

How to Protect Yourself From Cashier's Check Fraud

Cashier's checks are considered one of the most secure forms of payment available since they're both issued and guaranteed by a bank. But they can also be used in financial scams.

For example, someone you don't know may send you a cashier's check to be deposited into your account, and then ask you to transfer that money to a third party. Or they may send you money or wages from a job with a cashier's check, and ask you to return a portion of it in cash or in gift cards. You'll lose money when you realize the cashier's check was fraudulent and you never received the payment you were promised.

To avoid cashier's check fraud, follow these best practices:

• Don't accept checks from people you don't know. If someone is offering to send you money and it seems suspicious or too good to be true, it probably is. You can request the person make the payment in cash—for example, if you're selling an item you posted online.
• Verify the check with the issuing bank. Call the bank and confirm the check is, in fact, a properly paid-for and verified cashier's check before depositing it or taking further action.
• Wait for the check to fully clear before making a payment. Don't send someone money they've asked for before seeing that the money they've promised to pay you appears in your account. They could still reverse their payment, however, even a few days after you see the check has cleared. So, ideally, don't accept money if you're at all unsure about the sender's trustworthiness.

Learn more: How to Protect Your Bank Account From Fraud

The Bottom Line

Cashier's checks are a safe way to make a major payment or send money quickly, such as for a real estate transaction. You may, in fact, be required to use a cashier's check in certain cases. When you're comparing checking accounts, take a look at the fees for services like cashier's checks, and know that if you have questions about the best way to make a payment, your bank should be available to provide guidance and support in keeping your money secure.