How to Get a Cashier’s Check and Why You Might Need One.
How to Get a Cashier’s Check:Cashier’s check is that option that allows you to pay for your big purchase just when your merchant does not accept credit cards or personal checks. Also carrying large amounts of cash can be a liability and a lot more difficult than carrying a check. This article gives us more insight as to what cashier’s check is allabout.
A cashier’s check is often requested as payment for big purchases, like the down payment on a house. That’s because it’s drawn from a bank’s account and is as good as cash.
You can’t bring a regular personal check to a closing because the seller will be handing over the deed to the house – and there won’t be time to make sure your check clears.
Same goes when you are buying a car, and you’ll be taking possession of the vehicle – driving away in it – once you pay. For smaller transactions, vendors will often accept a money order, which is another form of guaranteed payment.
Cashier’s checks, also known as teller’s checks, are checks that draw on the bank’s own funds to make the payment. They’re as good as money in the bank because, well, they are the bank’s money in the bank.
Once a bank creates a cashier’s check, the bank guarantees to pay the amount printed on the check. A legitimate cashier’s check will not bounce.
To get a cashier’s check, you need to bring the cash to the bank. Or if you have an account there, you need to have the amount in your account and the bank will withdraw it, moving it to the bank’s own account. The money will then be available when the payee cashes the check.
A cashier’s check is different from a personal check because the money is drawn from the bank’s account. With a personal check, the money is drawn from your account, which may or may not have enough money to cover the check.
Also, once a cashier’s check is written, it is an involved process to cancel it. With a personal check, you just rip it up or call the bank to stop payment.
Why You Need a Cashier’s Check
Despite more modern alternatives, cashier’s checks are still popular for substantial payments. Assuming the check is legitimate (more on that below), cashier’s checks are among the safest ways to receive payment.
Banks and credit unions receive money before printing a cashier’s check. The bank either removes money from the account holder’s account or requires cash from whoever requests the check.
Banks set that money aside and, as a result, can guarantee that the check will clear. This provides security to the recipient, who is often selling something.
With a personal check, on the other hand, a check will only clear if the funds are available in the check writer’s account when the recipient tries to deposit or cash the check.
After depositing, the recipient or seller can use the funds almost immediately. The first $5,000 typically must be made available within one business day (compared to the first $200 for personal checks).
Banks are allowed to hold amounts above $5,000, or any amount they suspect might be problematic, but cashier’s checks usually clear much faster than personal checks.
How to Get a Cashier’s Check
Order cashier’s checks from your bank or credit union.
Request the check:
Ask your bank about the requirements to order a check. You typically need funds available in your account, or you need to bring cash to the bank.
In-person: You can walk into most brick-and-mortar banks to get a check issued. Within a few minutes, you should have a check in hand, and you can pay the recipient immediately.
Online: Some banks—particularly online banks—allow you to request cashier’s checks online. The bank might only mail checks to your verified mailing address, so you need to wait for the check and then forward it to the ultimate payee.
Your bank needs several details to issue a check.
Check amount: You need to tell the bank exactly how much the check is for. That amount is printed on the check and cannot be changed.
Payee: Provide the name of the payee (the person or business the check should be payable to).
Other details: You can add a “memo” or notes on the check. For example, you might include your account or a reference number.
Identification: If you visit a bank branch in person, bring valid identification (a driver’s license, passport, or other government-issued ID).
Fees: Expect to pay a modest fee for cashier’s checks. Banks and credit unions typically charge around $10 or so per check. To cover that cost, you need extra money in cash, or available in your account.415
Credit union members:
If you use a credit union, you can often obtain cashier’s checks from almost any credit union location nationwide (not just your own credit union) with shared branching. Bring ID and information about your “home” credit union. Call ahead to be sure the credit union you plan to visit provides cashier’s checks.
If you don’t have a bank account: You can walk into any bank or credit union and ask for a cashier’s check. However, some institutions only issue checks for customers, so you may have to try several different locations (or open an account). You could also try a money order instead if the payee allows it.
Consumers most often use cashier’s checks to pay a merchant or vendor that requires cash but will not accept personal checks.
Cashier’s checks also are used in cash trades that must settle quickly, such as with real estate and brokerage transactions.
“Since cashier’s checks are written off the bank’s funds, they settle much faster than personal checks,” Stammers says. In many cases, the funds are available the next day, he says, while personal checks can take days or even longer than a week to clear in some cases.
Security is another big advantage of using a cashier’s check to make a payment.
Pros and Cons
If a cashier’s check is authentic, it’s drawn on the funds of a bank, and not on a personal or business bank account. So the payee is assured the funds are available, according to the Office of the Comptroller of the Currency (OCC)
Settlement is usually faster than with a personal check.
Can be cashed only by payee, lowering the risk of theft. Also, a stop payment can be placed if you lose it, according to the OCC.
There is usually a fee. For example, Bank of America charges $15 for a cashier’s check and Wells Fargo charge a $10 fee when issuing a cashier’s check to customers who’ve opened savings or checking accounts, although banks often waive this fee for customers who meet specific account requirements.
Forged cashier’s checks are being used more often to defraud people.
Avoiding Cashier’s Checks Scam
Unfortunately, not all cashier’s checks are legitimate. They are regularly used in scams because sellers assume they’re 100 percent safe. A typical scam involves:
Somebody sends you a cashier’s check.
Something odd happens (they send too much, they send extra for shipping, or their “plans change”).
They might ask you to send money back to them, or send the excess to somebody else.
Your bank assumes the check is valid and allows you to withdraw the funds.
The check eventually comes back as fake.
Your bank reverses the deposit, and you owe your bank money.
1. What is a cashier’s check?
A cashier’s check is a check that is issued by a bank, in which funds are guaranteed by the bank since it comes from the financial institution.
2. What’s the difference between a cashier’s check and money order?
Both cashier’s checks and money orders essentially do the same thing, but the difference is that a cashier’s check is written out by a bank, whereas a money order is not.
3. How much do they cost to buy?
If you’re already a customer at the bank you’re seeking a cashier’s check from, you can find the cashier’s check fee in your checking account fee schedule.
4. How do you cancel a cashier’s check?
If you are still in possession of a cashier’s check and you want to cancel it, bring it back to the bank where you originally got the check and you will usually have to fill out a deposit slip to have the funds put back into your account.
5. What do you do if you lose a cashier’s check?
If you have misplaced it, go to the bank and put a stop payment on it. There will be a fee to stop the payment and it will usually be pricier than to stop payment on a regular personal check.
Cashier’s checks offer a secure method of payment for large amounts. They come with almost immediately available funds and little risk of check bouncing.
These guarantees make cashier’s checks the payment method of choice for large purchases. If you are buying a house, your lawyer will likely tell you to bring the down payment as a cashier’s check to the closing.
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