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Financial Topics & Tips

Cashier’s Check 101: When You Need One and How to Get It

If you’re about to make a major purchase such as a new home or car, and you plan to use a significant amount of your own money, you’ll probably be asked to pay with a cashier’s check. If this process is new to you, here’s what you need to know.

What is a cashier’s check?

Unlike regular personal checks, which are drawn directly from your account, a cashier’s check is drawn from a bank or credit union’s assets and bears the signature of a teller or cashier. Also unlike personal checks, the bank guarantees its cashier’s checks. That’s why cashier’s checks are so attractive to sellers and why this is the required payment method for so many large purchases.

How do cashier’s checks differ from certified checks or money orders?

People often confuse cashier’s checks with certified checks or money orders, but they’re not the same.

•   A certified check is simply a personal check with bank certification that your account has enough money to cover it and that your signature is genuine. Certified checks are safer for sellers than regular personal checks but not as safe as cashier’s checks.

•   You can buy money orders for a small fee from a third party like a post office or convenience store. Because maximum limits often apply — for example, $1,000 through the U.S. Postal Service — this payment method may not be appropriate for large purchases.

Are cashier’s checks safe?

The fact that banks guarantee cashier’s checks makes them a safe option. Banks also require purchaser ID and the name of the payee at the time of issue; you can’t get a blank cashier’s check. Additionally, some banks receiving a cashier’s check won’t make funds for more than $5,000 available until the issuing bank clears it.

Is it hard to get a cashier’s check?

Getting a cashier’s check is easy. You’ll need to go to your bank or credit union in person, though, since you can’t get one online or over the phone. After you show ID and provide the recipient’s name and the check amount, the teller will verify that you have enough money in your account and withdraw the check amount. Some financial institutions provide this service free; others charge a small fee, typically $10 or less. In either case, within minutes you’ll have your signed cashier’s check in hand.

TTCU offers cashier's checks for a low cost of $5 for our members.  If you are over age 55 and a member of TTCU, you can get one free each month.

If you don’t have an account or are traveling far from your bank, you may be able to find a financial institution willing to issue a cashier’s check if you bring the total amount, plus any service fee, in cash. Often, though, you’ll have to open an account to get a cashier’s check. Compare checking costs and fees to find the best value in your area. 

What happens if I change my mind or lose my cashier’s check?

If you decide to back out of your purchase at the last minute, chances are all you’ll have to do is return the cashier’s check to the bank, and it will deposit the money back into your account. Losing a cashier’s check is more complicated. You’ll have to file a declaration of loss with the issuing bank and wait 90 days from either the original issue date or the date the loss was filed to get a refund. Also, many banks require you to buy an indemnity bond, which ensures that the purchaser is liable for the new check, before they will issue a replacement check.

Cashier’s checks are the preferred method of payment for many sellers and for good reason. With a minimal risk of fraud or theft, they’re one of the safest ways for all parties involved to complete large purchase transactions without a hitch.

Reprinted with permission.  © Copyright 2017 - NerdWallet, Inc. All Rights Reserved.   Cashier’s Checks are available at TTCU; visit any branch!