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What is a cashier’s check?
Use this option for large purchases or sales, but beware of scams.
Cashier’s checks are often used when making large purchases, such as buying a home. As long as you have enough money in your account, getting a check from your bank isn’t difficult. Here’s what you can expect from a cashier’s check, its common uses and requirements.
What is a cashier’s check?
A cashier’s check is guaranteed by the financial institution that issues it. While it may look like a traditional check, it’s actually more like paying with cash. This is because the bank has to verify that you have enough money in your account to cover the amount.
Every bank is different, so you might want to call ahead to make sure you have all the requirements. In general, make sure you have the following information on hand:
- Name of the payee. You need the exact name of the person or business you’re paying. Your bank won’t issue the check with this field blank. And if you misspell the name, the payee can’t cash it.
- Amount. Make sure you know the exact amount that you’ll need. If you add the incorrect amount, you’ll have to pay to issue another cashier’s check.
- Form of identification. You’ll need a government-issued ID, such as a driver’s license or passport and your account number.
- Memo text. Because a cashier’s check is a legal document, it’s a good idea to indicate what the check is for in the memo.
Cashier’s checks are typically issued to make a major purchase or large payment, such as buying a car or a home or making a down payment on a loan. But you can also use one when a payment needs to settle quickly, because cashier’s checks don’t need time to clear like a traditional check.
How much does a cashier’s check cost?
The fee to issue a cashier’s check is usually between $7 and $10, but some online banks issue them for free. We’ve compared the fees charged by the 10 largest banks below:
|JP Morgan Chase||$8|
|Bank of America||$10|
|Capital One||$20 if purchased online with overnight shipping;|
$10 if purchased at the branch
|HSBC North America||$12|
Compare the 10 largest banks
Are cashier’s checks safe?
The bank’s guarantee makes a cashier’s check safe. But it can be forged just like any financial document. Some of the most prevalent cashier’s check scams include:
How to spot a fake cashier’s check
Use the following tips to avoid accepting a fake cashier’s check:
- Payee’s name. A cashier’s check will always have a named payee. If yours is blank, it’s probably a fake.
- Amount. If the amount on the check is for more than you’re expecting it may be fake. Make sure you don’t return the difference in cash.
- Name of the bank. Some fakes have legitimate banks displayed on the check. Be wary if you’ve never heard of the bank or if the bank is overseas.
- Phone number. If there’s no phone number for the bank displayed, you are probably holding a fake cashier’s check. If there’s a phone number, verify it online.
- Verify the check. Always verify a cashier’s check with the bank of origin.
- Security features. Most fraudulent checks won’t have common security features like watermarks, security thread or microprints . And if they do have those features, they’re usually low quality.
Can I cancel a cashier’s check?
You can put a stop payment on a cashier’s check, but it typically costs more than when you stop payment on a traditional check. After the stop payment, you may not have access to your funds for anywhere from 30 to 90 days, depending on your bank’s policy.
How cashier’s checks compare to other guaranteed forms of payment
Using a cashier’s check isn’t the only way to pay for something securely. You can also purchase a money order, certify a check or use a wire transfer to send money, but each of these methods have different costs and uses:
|Cashier’s Check||Money Order||Certified Check||Wire Transfer|
|Best for||Large purchases||Purchases under $1,000||Large purchases||Sending money overseas|
|Drawn from||Your personal account||Cash or your personal account||Personal account||Personal account|
|Average cost||$10-20||$1-2 at retail locations|
$5-10 at banks
|$5-$15||$20-$30 domestic |
|Where to issue/purchase|
Cashier’s checks are the preferred currency for real estate and other high-dollar transactions, because the funds are guaranteed by your bank. If you tend to make large purchases requiring a cashier’s check and pay a hefty fee for each one, you might want to consider looking at other checking accounts at other banks.
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