The cashier’s check is a powerful means of payment that many people don’t fully understand. So what is it and how can you get it? Read on to find out.
What is a cashier’s check?
A cashier’s check is a payment instrument that a bank or credit union may issue to eligible recipients. This type of check guarantees payment. While this sounds like a personal check, a check is not drawn from the money of the recipient’s own checking account.
The money from the financial institution covers the cashier’s check. This means that there is always enough money available, that there are often specialized security features and that the check is not declined. Again, don’t confuse this with a money order or wire transfer.
Although the cost for a cashier’s check is higher than a money order, these transactions are considered more secure and are available in higher amounts.
5 steps to get a cashier’s check
This seems simple enough, but there can be complications when applying for and receiving a cashier’s check. Follow the five steps below to request and receive this type of check.
1. Make sure you have enough money
You must prepay the exact amount for the cashier’s check in cash, debit card, or check. You cannot purchase official checks such as cashier’s checks with a credit card.
Simply put, you must have enough money to get the check. If you pay by check, the issuer may require the money to be held until the check clears.
Make sure you understand the fees at the company of your choice. Most financial institutions charge a standard fee for cashier’s checks for issuance. The fee may vary depending on the institution and the amount of the check. Typically, they are small amounts, ranging from $5 to $15, but can be higher for larger amounts.
2. Decide where to get the check from the cashier
Different types of locations issue cashier’s checks. While you can stop at a post office for a money order, it’s not so easy for cashier’s checks. Again, understand your needs and what the institution of your choice can offer.
Both traditional and online banks typically offer cashier’s checks. bank of AmericaWells Fargo and Capital one are great examples of US banks that are members of the FDIC where you can get a cashier’s check online or at a physical bank branch. These are often the best places to start, as almost everyone has a bank account and can usually take advantage of rewards with their program.
Credit unions can offer checks to their members, similar to issuing banks. For those with a high credit score, this may be your choice.
Savings and loan associations also offer a wide variety of services, sometimes including cashier’s checks. Real estate agencies usually specialize in cashier’s checks for value sales. This might be what you’re looking for.
The money service industry is another place where you can find cashier’s checks. These companies, such as Western Union or MoneyGram, also offer cashier’s checks as a method of payment.
Related: When looking for financing, credit unions can be worth looking into
3. Collect your documentation and account information
Start with the name. This can be your name or the name of the payee (or entity) funding the check. In addition, some institutions will request a reason for the audit to provide documentation for tax purposes.
Also be prepared to provide identification. This usually includes one valid government issued photo IDsuch as a driver’s license or passport.
Finally, have your payment method ready. You must pay the cashier’s check in advance. Some banks may also accept a personal check if the money is available in the account. Be sure to research with your institution what payment methods are available.
4. Make sure you have the correct information about who you are paying
Review and recheck the information you provide for the cashier’s check. This is part of the security measures that institutions must use for cashier’s checks.
After submission, remember all the information you use in case you need to verify this information later.
5. Go to your chosen institution and ask for the check from the cashier
Finally, once you have submitted the information and payment, go to the institution of your choice to receive your cashier’s check. This process may vary depending on your setup, so see below for the nuances of these different receiving options.
Where can you get a cashier’s check?
The three main places to get a cashier’s check are at a bank, credit union, or online. While the basic steps apply to all types of settings, there are a few nuances.
How does getting a cashier’s check work at a bank?
You must personally apply for a cashier’s check at a bank. Please bring the information discussed above and any other information relevant to your situation. The cashier from whom you request the check issues the cashier’s check, which has the name of the bank as the issuer.
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How does getting a cashier’s check work at a credit union?
The process at a credit union is the same as at a bank. As discussed, make sure you understand the needs of your specific credit union by researching their website or calling ahead. Bring the information you need to receive your check as quickly as possible.
How does getting a cashier’s check work online?
The online process varies by institution, but its accessibility makes this option attractive to many more people.
Some banks and credit unions allow you to obtain a cashier’s check through their website, while others require a personal visit or phone call. In addition, some online-only banks do not offer cashier’s checks at all.
What are the benefits of using a cashier’s check?
Now that you understand where and how to get a check, what are the benefits? Why would you pay with these kinds of checks?
Cashier checks never bounce
Because the financial institution supports this type of check, it won’t bounce like a personal check can when you make a large purchase. This means you can reliably buy a car or boat or even make a down payment on a house without worrying about the check being an invalid form of payment.
Rapid availability of funds
Again, because the financial institution backs it, the funds are typically available as soon as the check is deposited or cashed (usually within one business day).
When a cashier’s check is deposited or cashed, the financial institution verifies the authenticity and availability of the check and then releases the funds to the recipient.
What are the disadvantages of cashier’s checks?
While this is a powerful and unique tool, using the cashier’s check has some drawbacks.
Most financial institutions charge a standard fee for cashier’s checks for issuance. The fee may vary depending on the institution and the amount of the check. Typically, the cost ranges from $5 to $15, but can be higher for larger amounts. However, there are still a few.
Banks and credit unions are notorious for their fees, especially for cashier’s checks. These costs can add up quickly, especially if you use them often.
When researching cashier’s checks, understand your specific institution’s policies and fees for any transaction you may be considering.
Related: Best personal loan rates for 2023
Potential for scam
Check scams are everywhere. In any institution there will always be problems due to human error. As such, it is essential to understand that cashier’s checks can be counterfeited and counterfeited.
You don’t really need to worry if you are the one considering this type of payment, but for anyone who receives this as payment, be wary of this issue. You may just receive a worthless piece of paper.
What are some tips for using cashier’s checks safely?
Due to the risk of fraud, many security measures have been put in place to access and use a cashier’s check. However, as the holder of one of these checks, you can do a number of things to maintain that level of security.
Keep your check in a safe place
Keep your check in a safe place to prevent loss, theft or damage. Your approval is one of the last security measures: do not endorse it until you are ready to use it.
Quickly use the check
Use your check quickly. Cashier checks usually expire after a certain amount of time, usually 90-120 days. Be sure to use or deposit it before it expires to avoid complications.
Do not give unnecessary personal information
When you use the cashier’s check to pay, make sure you don’t provide any personal information that could be used for identity theft or fraud.
Additionally, beware of check scams such as overpayments or requests for a partial refund. Always check the authenticity of the check before accepting or cashing it.
Notify your lender if your check is lost or stolen
Finally, if you lose your check or it gets stolen, notify your borrower immediately. They may be able to stop paying the check and issue a replacement.
What are the alternatives to cashier’s checks?
While cashier’s check is a great way to go, there are a number of other options you can use as payment, similar to cashier’s checks, with different benefits.
1. Money Orders
Money orders are another form of payment that you can use as an alternative to cashier’s checks. Like cashier’s checks, money orders are a secure form of payment when a personal check or cash is not acceptable or convenient.
If your goal is not to use your money for large items, money orders may be the tool you want to use. This is because people typically use money orders for smaller transactions. Getting a money order is similar to getting a check from a cashier.
Related: Your step-by-step guide to filling out a money order
2. Certified Checks
Certified checks are another secure payment method that you can use as an alternative to cashier’s checks. A certified check is a personal check certified by the issuing bank or credit union. To get a certified check, you must first write a personal check for the amount you need and then take it to your bank or credit union to get it certified.
One of the main differences between certified checks and cashier’s checks is the level of guarantee.
With a certified check, the funds are only guaranteed by the issuing bank or credit union, while with a cashier’s check, the funds are considered as good as cash because the institution backs them.
Related: 10 questions to ask before applying for a bank loan
How can you use a cashier’s check?
Cashier’s checks are backed by bank funds and can be a valuable tool for your personal finances. Because of their high dollar limit, you use cashier’s checks to make purchases for large amounts.
As discussed earlier, another way to use this tool is in real estate. Cashier’s checks are often used as a reliable down payment on a home. You can also use this to pay bills or rent houses. These are just a few ways to take advantage of your cashier’s check.
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