Cashier's check vs Certified Check Comparison
Many people don’t know about the differences between a certified check and a cashier check. They usually use the two terms interchangeably, and though some think they’re the same, they are two different things.
Their differences arise mainly from their procedures, checks, and transaction terms and conditions.
Also, though the financial world is currently going digital, we cannot resist using paper to complete some transactions.
The paper still plays a central role in your transactions especially in situations where want to make large purchases, or when you don’t prefer online transactions.
You will need to differentiate the different types of checks, their benefits, and drawbacks. So, what is a cashier check, certified check, and what are their differences.
What is a Cashier’s check?
A cashier’s check is a guarantee which assures the recipient that the sender has enough funds to complete the transaction. This check is drawn from the bank’s funds and not the sender.
When you want to write a cashier check, the bank will verify you have enough balance in your account to cover it. It will then transfer your cash to the bank account, and they issue the cashier’s check against the bank’s funds.
Some banks charge a transaction fee for the cashier’s check, which can go up to $15. But you must also indicate the name of the payee and the amount to pay before you can be written a cashier check.
Cashier checks offer higher levels of security to the recipient and the account holder.
For instance, if you don’t want the recipient to know your account number, then the bank won’t divulge any of your details in the cashier's check.
Besides, they are also ideal for providing secure payments even without checking accounts.
Therefore, if you don’t own a bank account with the institution, you can pay cash and be written a cashier’s check. You will enjoy more security with a cashier check compared to its alternatives such as personal checks and certified checks.
This payment method is ideal when making large purchases such as land or car. For instance, if you want to spend $1000 on a car, the seller might not prefer personal checks due to their high risk.
Instead, you will give them a cashier’s check, which will be the best alternative to carrying large amounts of cash.
A cashier’s check is the best payment method for many scenarios, and it's also called an official check.
Besides, they don’t have a limit on the money to be written on the check u, like money orders and other alternatives. However, if you pay a lower amount, it’ll be wiser to use money orders as they are more affordable than cashier checks.
Advantages of Cashier’s Checks
With a cashier’s check, you will enjoy more secure payments. This is because the bank guarantees your funds' security, and they draw against their own funds.
Therefore, you won’t have any overdrafts in your bank.
It’s easier and faster to access funds from cashier checks than other conventional payment methods.
Banks and other financial institutions have their policies on the funds' availability for different forms of payments. While you may wait for some 3 business days, others could take even up to 10 business days.
There is a reduced risk of using a cashier check as the payee can only redeem it. Besides, they have extra security features, including watermarks and signatures to prevent duplication.
Disadvantages of Cashier’s Checks
Though they have extra security features to prevent scammers, they are not safe from fraudsters. Some scammers will present cashier checks that look authentic, but they will be rejected once you submit them to the bank.
Unlike personal checks w, which can be written at home, the cashier’s check requires you to visit your bank or one of its branches. Therefore, if you want to write a cashier check besides the normal hours, it won't be easy.
For instance, if you want to write a cashier check on Sunday, it won’t be possible to process it until Monday. This works when the bank does not operate on weekends.
While some banks offer certified checks for free, others have attached a transaction cost to it. Therefore, you have to contend with some fees of up to $10 to take them home.
Cashier Check and Certified Check Fraud
Though cashier checks and certified checks come with additional security features, they are still susceptible to fraudsters and scammers.
Most scammers take advantage of the fact that it takes banks many business days to process these checks. Therefore, you might not realize the check is fake until a few weeks later when it's rejected.
The law requires financial institutions such as banks to make the check funds available one day from when the deposit is made.
Therefore, if you receive a fake check, then you will go to a loss for the goods you traded for the check.
Additionally, since it takes time to verify the check's authenticity, you will have to pay for any funds you spent from the fraudulent check deposited to the bank.
Most fraudsters usually give traders a check with a higher amount than they’re supposed to pay for goods and services.
They request a refund of the extra amount, and this is one of the red clues to observe when you want to identify a non-legit trader. But even if you receive one of the correct amounts, it’s still wiser to practice caution to avoid being scammed.
To verify the check, call the bank issuing the check and confirm whether the details and transactions are active.
There is a number on the back of the check, but I wouldn’t recommend calling it as it may also be fake. Instead, call the bank and give them the check number and the account number, and the transaction name.
If you are dealing with a cashier’s check, you need to check the requester's name.
What is a Certified Check?
A certified check refers to an acknowledgment for a check, and it usually has a bank signature. In a certified check, the amount is debited from the customer's account, and therefore, he/she must have enough balance before initiating this type of payment.
If you are a recipient of the transaction, then the UCC law might allow you to charge the customer and the bank. These parties can liable for the transaction, and therefore, you can charge both via a lawsuit if your certified check has issues.
Banks usually impose different conditions on the certified checks, such as their expiration date.
For instance, the Bank of USA may add a condition in their certified check which mentions that the check is invalid 30 days from its certification.
If this check has a problem, i.e., fraud and others, the bank will notify the payee if you have not complied with the transaction needs.
Therefore, if you had acted in the “reliance,” then it could mean that you accepted the certified check as payment for your goods. If it's fake, then the bank will not pay you as it’s not obliged to pay for fake certified checks.
Considering they have to be verified by the bank before use, certified checks are not ideal for everyday needs.
Instead, you will use them only to make large purchases such as a deposit for a car or other items you saw online. Since this check is certified, the seller will be protected from the bouncing of the check.
But also note that not all banks and credit unions have certified checks. It's therefore important to verify with your bank whether they offer this check.
Besides, to verify your check, you will need to visit the bank physically, which can be challenging if you’re at a remote location.
You cannot order a certified check online, and some traditional banks don’t offer this check to their customers. And if the bank doesn’t offer this option, it’s time to opt for the cashier’s check.
Advantages of Using a Certified Check
When you use a certified check, you get a guarantee of receiving your payment. This is important, especially when making large purchases, as you won’t need to worry about losing money due to a bounced check.
This is because once you write a certified check, the bank will hold the funds in your account for offsetting the transaction. These funds won’t be available for other checks and general transactions.
If you have a poor credit record or you have filed for bankruptcy before, then paying for goods online can be challenging.
The vendor may require this check e, especially if they don’t trust you to honor your part of the deal due to credit problems.
If you don’t have a certified check, your other alternative will be paying with cash which is quite risky since you will be making purchases online.
Low fees: The fees for certified checks are lower in most banks, and other times, they can be waived, and you get the check for free.
The average fees for certified checks are $5 to $20, and the higher-transaction checks have higher fees. In case you own a top-level account, the bank will charge you lower fees.
Disadvantages of Certified Checks
There is no turning back after sending a certified check. Therefore, once you sent it, there are no ways to protect you. It’s impossible to stop this type of check even when you realize the transaction is now a scam.
Higher transaction fees: Most banks charge fees for certified checks, and some have set up a list of the transaction fees for writing certified checks worth different amounts.
Therefore, besides fulfilling the transaction on your side, you have to contend with extra fees.
Should you Choose a Cashier’s or Certified Check?
Cashier checks and certified checks might seem similar, but in reality, they are different. But they share some similarities, i.e., in their higher levels of security.
But this doesn’t make them foolproof from scammers and fraudsters as they can be duplicated.
They are safer than personal checks, and they have a higher security guarantee to protect your funds.
The certified check serves the customer’s interest primarily than the payee. This is because the funds remain in the account of the customer until the recipient withdraws them.
On the other hand, the cashier’s check serves the recipient's interest more as the funds are debited from the bank account of the customer once the check is signed.
This prevents the situation where the check bounces due to insufficient balance on account of the customer.
Cost of a Cashier Check
The average cost of a cashier’s check is $10. However, some banks usually waive this fee for accounts withdrawn from high-level accounts and other types of special accounts. You can access the cashier’s check from your bank or credit union.
It’s impossible to buy a cashier check online, and you have to drop by your bank branch to get the check.
Most financial institutions also regularly advise customers to visit the nearest bank branch, but you can request payment online if you’re unable to do so.
There are no transaction fees when sending the money online, and you can also utilize peer-to-peer transfer services such as Venmo.
Cost of a Certified Check
Most banks and credit unions charge some fixed fees for the certified checks. Customers usually pay varying fees based on the amount, bank, and account. But on average, it ranges from $5 to $15.
Cashier and certified checks are some of the best options than paying with a personal check, cash, or credit cards. And if you want to enjoy more security, then I will recommend the cashier’s check.
This is because the bank will draw the funds from their account and not from the customer’s.
And though you don’t have many chances of paying or receiving payments via paper nowadays, these checks will enable you to make payments more conveniently.
After reviewing the differences between the cashier check and certified check, you should be able to decide on the right payment method that favors both you and the other sender or payee.