Cashier’s checks are a preferred way to pay in certain financial situations when you need to make a large payment or you’re concerned about payment security.
To add to that, you can now cash your cashier’s check online in less time without having to leave the comfort of your home.
This guide put together by The Wealth Circle breaks down the basics of cashier’s checks, how they work, where you can get them, when you may want to use one, and how to cash a cashier’s check online.
Quickly glance through the table of contents below.
What Is A Cashier’s Check?
Cashier’s checks, otherwise known as teller’s checks, are checks that draw on the bank’s own funds and signed by a cashier to make the payment.
According to Wikipedia, Cashier’s checks are treated as guaranteed funds because the bank, rather than the purchaser, are responsible for paying the amount. Once a bank generates a cashier’s check, the bank ensures to pay the amount printed on the check.
When you demand a cashier’s check from your bank, money transferred from your account and into the bank’s account, and then a bank representative (usually a teller) signs it over to a named third party. (The check will incorporate the names of both the recipient and remitter.)
That is to say, the buyer of the cashier’s check pays the bank upfront for the full amount of the check. The bank deposits those funds and then issues the cashier’s check to the designated payee for the amount requested.
A customer who obtains a cashier’s check pays for the full face value of the check and generally also pays a small premium for the service.
Unlike the personal check, a cashier’s check allows the money to be drawn from the bank’s account. With a personal check, money is drawn from your account which may be insufficient to cover the check.
Knowing full well what a cashier’s check is, when is it advisable to use it?
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When Should I Use A Cashier Check?
Often times, people use cashier’s checks in making large purchases where it’s not practical and best to bring physical cash.
Real estate is a good instance because you wouldn’t hand over such large amounts of money without receiving the deed right away. And, the seller wouldn’t hand over the deed without confirming payment. Since a financial institution’s account backs a cashier’s check, a cashier’s check is one of the securest forms of payment.
Cashier’s checks are timely and sensitive transactions. The funds are usually available immediately—in most cases, the next day. Therefore, if you’re looking to make a big-money purchase, a cashier’s check may be the safest way to go.
You can use a cashier’s check to do the following:
In other words, you don’t use cashier’s check for the routine daily spending.
Where Can I Get A Cashier’s Check?
Cashier’s checks are only sold by banks, credit unions, or online financial institutions. Most banks and credit unions make cashier’s checks available for a fee, which is usually around $10 per check, though some types of accounts allow bank customers to get free cashier’s checks.
From a bank
To purchase a cashier’s check from a bank, you’ll need to provide identification and other relevant data like the amount of the check, the correct spelling of the payee’s name, and any other complimenting document or information.
This information provided will be printed on the check and there won’t be room to add or cancel out using a pen. Therefore, fill in the right details.
If you have a bank account, the amount demanded is withdrawn from your personal account and moved to the bank’s account.
If you don’t have an account with the bank, you have to pay the money physically for the cashier’s check to be processed. Once the teller prints and signs the check, it’s ready for use.
Note that some banks sell cashier’s checks only to their customers. Therefore, it is expedient for you to make inquiries to know if your intended bank issues cashier checks to non-customers.
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From a credit union
Obtaining a cashier’s check from a credit union follows the same process with the bank. One notable difference, though, is that you can get a cashier’s check from any credit union, whether you are a member or not.
Financial institutions online
Lastly, you can order a cashier’s check online. This differs from place to place, but most banks will only grant this service to their customers. When you request a cashier’s check online, the bank normally sends a physical check to your mailing address after you must have paid the delivery fee.
Once you receive that cashier’s check, it is your responsibility to get it to the recipient. This saves you a trip to the bank but might take longer since you have to rely on the mail. If you order a cashier’s check online, expect to pay a delivery fee.
Are There Risks Of Using Cashier Checks?
Cashier’s checks offer a secure method of payment. Security features printed onto the check prevent any possible fraud. Nonetheless, there are cases of scams where the victim receives a cashier’s check in the mail from an unknown person, who then asks the victim to send some of the money back.
A fraudulent cashier’s check will likely clear immediately when first deposited. This is because the bank has confirmed that the funds will be available. But when the bank discovers that the check is fake, often a few weeks after the deposit, they take the money back. Unfortunately, the recipient is out of pocket for any money that has been spent.
Because of this, you should take extra precautions with a cashier’s check that a stranger sends to you as a gift, reward, or unexpected refund. Show it to a teller to certify that the check is legitimate. If you are really concerned, you could also wait several weeks to make sure the check has cleared before you spend any of the funds.
How Can I Cash A Cashier’s Check Online?
Cashing a cashier’s check online saves you the trip of going to the store or bank as you get to do it right from the comfort of your home. If you have a checking account with a bank that offers an online deposit or mobile deposit, you can always cash a cashier’s check online. Banks like; Bank of America, Chase, U.S. Bank, TD Bank, and so on offer online or remote check deposits through their mobile apps.
Steps to follow in order to cash a cashier’s check online. To cash a cashier’s check through a mobile app, you simply need to…
#1: Endorse the check as you normally would and write “For Online Deposit Only” underneath.
#2: Following the banking app’s instructions, take a photo of the front and back of the check using your phone camera, and confirm that the auto-populated information for the check is correct.
#3: Once you’ve made the deposit, the funds will be available in your account within one to two business days. It is best to keep the check for 14 days to ensure that it clears without any problems, then tear the physical check.
While most banks won’t have a problem accepting cashier’s checks through online deposit, it’s important you look out for the particular bank’s mobile deposit policies to be sure that this type of check is accepted.
Bear in mind that using a mobile app is technically making a deposit, getting physical cash. If you need physical cash in hand, you’ll still need to visit a store or go to a bank branch or ATM to make a withdrawal.
Are There Alternatives To Cashier’s Check?
Asides from the cashier’s check there are other options for making large payments. So, if your payee doesn’t give it a nod, don’t panic. All you need to do is utilize any of the following options below to send that cash and seal that deal.
A money order isn’t a check, but it is a secure form of payment. You obtain the money order for a specific amount and write it out to the payee. He or she takes it to the bank and either deposits or cashes it.
Unlike the cashier’s check, a money order may be less expensive. The U.S Postal Service offers them for $1.75 or less. They are also easy to access as you’re not limited to finding them at banks and credit unions.
You can buy money orders from a post office, supermarket, gas stations, etc. Lastly, you don’t need a bank account to get a money order all you need is to have cash that covers the cash and the fee.
Certified checks are like cashier’s checks, but they’re drawn straight from your account. It’s essentially still a personal check, but it’s signed by both you and the bank. That means the bank guarantees the amount of the check to the payee. However, if there are inadequate funds in your account to cover it, you’ll have to pay bank charges.
A certified check may be less secure than a cashier’s check. Nonetheless, a certified check is still a more secure way to pay than a money order or a personal check.
With a wire transfer, money is sent automatically directly from your account to the receiver’s account with no check needed. This system makes the process a seamless one.
In all swiftness, wire transfer still has loopholes in terms of cost per change and delays in completing transfers. It can take several days for an international wire transfer to be completed, which may not be suitable for the payee.
Social Payment Apps
Social payment is the use of social media to transfer money to another person or business. The trend was first universalized by PayPal, and other companies have since invented their own versions, including Venmo, Snapcash, Google Wallet, Apple Pay, Twitter Buy, and lots more.
Social payment is a useful tool for not only businesses but also individuals, which can either use existing services or create their own proprietary apps. Transfers can be instant and—depending on where the money comes from—you may pay zero fees.
Cashier’s checks can be the preferred way to pay in certain financial situations when you need to make a large payment or you’re concerned about payment security.
This type of payment is guaranteed by the bank, which can offer reassurance to payees that the check won’t be returned for insufficient funds.