What is a cashiers check
A cashiers check is very similar to a personal check. It is used to make payments just like personal checks. The big difference between a cashiers check and any other type of check is that a cashiers check is guaranteed by the bank.
What exactly does “guaranteed by the bank” mean?
It means when the person who receives a cashiers check deposits it into their bank account, the funds will be drawn from the banks funds, and not an individuals funds.
This is the main reason why people request to be paid with a cashiers check. It’s much safer because the funds are more guaranteed. A problem many people have when being paid with a personal check or even a money order is that the funds aren’t as secure.
For example, a personal check can be faked. Also, we’re just really busy people and sometimes forget that we wrote a check and forgot about it, and when the recipient of the check deposits it, they could run into the problem of “insufficient funds” in your bank account. Or in your case, you suddenly have a large loss of money in your bank account you forgot to account for which can cause financial difficulty.
Money orders can be faked as well, even though money order funds are “guaranteed”. Though cashiers checks can be faked as well, its likely a much harder process because you need a bank tellers signature as well as their processing system to produce a cashiers check.
Where to get a cashiers check
Cashier checks can be obtained at your bank.
Here’s how the process works: You’ll go into your bank and request a cashiers check from the teller. You tell the teller the amount of money you wish to put on the cashiers check and you also need to tell the teller who the cashiers check is intended for. You cannot get a blank cashiers check.
The teller will look into your bank account and make sure you have the funds to cover the cashiers check. If you do, then the bank will perhaps freeze the amount from your account so you cannot spend it or transfer it to a different account so you can’t use it. Each bank has their own system for making sure you don’t have access to the funds anymore.
The teller will then draft up a cashiers check and it will be signed by him/her or a manager.
As previously stated, you can get cashier checks at a bank. Below are a few popular banks that offer cashier checks. Check with your bank if you would like to purchase a cashiers check or open a new bank account with a new bank if you do not want go through your own bank.
Wells Fargo cashiers check: You can find details for Wells Fargo cashiers check fees here. They charge $10 per cashiers check and you can request one in person or online.
Chase cashiers check: Chase’s premium plus account, the cost is $0 for cashier checks.
Walmart cashiers check: Walmart does not issue cashier checks, however they will cash them for you for a small fee. Visit a checkout to cash a cashier check. To find Walmart check cashing locations, click here.
Cost of cashiers checks
Cashiers checks generally cost anywhere from $7 to $10. Prices of cashier checks will vary depending on where you bank. Also, many banks offer free cashier checks if you have a certain type of bank account with them or have a certain number of financial products. If you require many cashier checks, it may save you money to have a bank account that gives you free cashier checks.
For a list of the cost of cashier checks from the biggest banks in America, Bank Tracker put together a very handy list here. You can also find the location of those banks as well with that link.
Money order v.s. Cashiers check
Money orders are very similar to cashier checks. In fact, they are pretty much the same thing with one MAJOR difference.
Money orders and cashier checks are both “prepaid” tools. This means that both are already “paid for” at the time of purchasing it.
But the big difference between a money order and cashier check is that a money order is not guaranteed. A cashiers check is guaranteed by the bank.
A few more minor differences between a money order and a cashier check:
- Money orders have limits on the amount, usually $500 or $1000 depending on where you purchase them. Cashier checks do not have limits.
- Money orders can be purchases at many places, like Western Unions, Banks, or Walmart. Cashier checks can only be purchased at a bank.
- Money orders are cheaper and are meant to be used to send/pay for small items. If a money order is what you need, click here to find money orders near you.
Main benefits of cashier checks
- They clear faster than regular checks – Under normal circumstances, ashier checks can clear within one business day. Sometimes banks will hold funds available once deposited, but nonetheless, cashier checks clear much faster than personal checks – the latter of which could take up to 5 business days.
- They are only issued by a bank – You can’t walk into a corner store and buy a cashiers check. Only banks issue them, making them a much safer payment instrument.
- Cashier checks are harder to scam – Though not impossible to fake, cashier checks are difficult to fake because they have more security features than a regular personal check. Some security features include the name of the issuing bank, recipients name, tracking information, and a signature of the teller/cashier.
- Cashier checks don’t have a limit – With money orders, there are limits to how much money order you can purchase. Cashier checks do not have limits. You can purchase cashier checks for very very large amounts of money.
- The funds are guaranteed and the responsibility is on the bank – Once the cashier check is drafted up, and the funds debited from your account, the bank is now responsible for funds. If there is an issue with withdrawing the funds when the recipient deposits it, it will be the banks responsibility to solve it.
- They are affordable – For the safety and piece of mind or large monetary transactions, it’s nice to know payment is secure from a financial point of view, both from the payee and payor side of things. $7-$10 probably isn’t a big deal when you’re buying $20 000 worth of something.
- You can purchase cashier checks even if you don’t belong to a bank – If you don’t belong to a bank or wish to purchase a cashier check at a different bank, you should be able to without a problem. You will need the full amount of money up front to pay for the cashier check, as they bank cannot debut funds from your account since you don’t belong to them.
- Excellent for buying expensive items like real estate – You’d probably only want to purchase a cashiers check when you are buying expensive items like real estate. It doesn’t make sense to order cashier checks for small items because of the cost associated with purchasing cashier checks. Also, smaller items tend to not need any “guarantee” of funds.
If you have any questions about cashier checks, drop me a comment below.