If you’re considering getting a cashier’s check or confused about how the process works, MyBankTracker has updated its basic guide on some frequently-asked cashier’s check questions.
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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.
Cashier’s checks are usually necessary when a person needs to make a large purchase (think a house or a car) and the recipient requires a guarantee they will get paid.
A cashier’s check provides good reassurance that the check will clear.
Once issued, a cashier’s check must be cashed within 90 to 120 days of the date of issuance.
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.
Both payment methods are drawn from funds that are guaranteed: a cashier’s check is guaranteed by the issuing bank, and a money order has already been paid for by the person who purchased it.
A cashier’s check can only be acquired from a bank, but a money order can be purchased at a variety of locations, including the post office, credit union, grocery store, and more.
Money orders usually have dollar limits on them, but cashier’s checks can go for much bigger amounts.
How do you get a cashier’s check?
There are varying policies at different banks, but there are a couple of options of getting a cashier’s check.
If you don’t have a bank account, you can go to a bank to see if they issue checks for non-banking customers, and if they do, there’s a chance you might be charged a fee for getting the cashier’s check.
If you’re not a customer of the bank you’re purchasing a cashier’s check from, you will need to have the full amount of the check at the time of purchase.
If you’re getting a cashier’s check directly from the institution you’re already banking with, make sure you have the full amount available in your account.
When you get a cashier’s check, you will need to know the exact name of the person you’re making the check out to.
Once you get the check, remember to retain a portion of the check for your records.
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.
We compiled a chart of the fees at the ten largest banks in America, and the prices range from $7-$10.
You should always check with your bank before acquire a cashier’s check.
In addition, if you are not a customer of the bank where you’re buying the cashier’s check, the bank might have different fee structures.
Sometimes banks charge a flat rate, and sometimes they will charge a percentage of the check total.
Some banks might refuse to grant a cashier’s check to customers who are not already banking with them.
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.
A teller will give you further direction on what to write on the backside of the check.
What do you do if you lose a cashier’s check?
If you have misplaced a cashier’s check, 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.
Different banks have different regulations, but once a cashier’s check has been canceled, you have to wait for a period of up to 90 days before the bank can issue you a refund.
What are some cashier’s checks scams to watch out for?
There is an increasing number of frauds related to cashier’s checks, so it’s always important to beware of scams.
One popular scam involves a person paying you with a cashier’s check for more than the amount agreed, and then asking you to cash the check and pay them the difference.
A scam artist replies to a classified ad or auction posting, offers to pay for the item with a check, and then comes up with a reason for writing the check for more than the purchase price.
The scammer asks the seller to wire back the difference after depositing the check.
The seller does it, and later, when the scammer’s check bounces, the seller is left liable for the entire amount.
Amy covers personal finances, student loans, and money management for younger adults. Her work has appeared in The Atlantic, Business Insider, New York Daily News, and more.