Upon opening a checking account, the account holder gains the ability to write checks to transfer money and make payments. A personal check has its benefits and limitations. For one, it may take time for a check to clear. Worries about a check “bouncing” due to insufficient funds may lead a business or other enterprise to have a “no personal checks” policy. While a personal check may not fit the criteria, a cashier’s check might.
A Closer Look at a Cashier’s Check
When someone writes a personal check, they stipulate they have sufficient funds to cover the payment. Of course, people make accounting mistakes, and the check may not clear. With a cashier’s check, the funds are not coming from anyone’s personal account. Instead, a bank or credit union guarantees the payment. Therefore, a cashier’s check is hardly likely to bounce. So, recipients may accept a cashier’s check as a guaranteed payment, not unlike cash payments. According to the professionals at SoFi, “This is different from a certified check where the money is withdrawn from an account holder’s check and then certified by the bank.”
Common Uses for Cashier’s Checks
When someone makes a large purchase, a cashier’s check could be preferable if not expected. Someone paying $15,000 for a car or $150,000 for a home may face requirements to present a cashier’s checks. Closing a home sale with a personal Checks seems unworkable. Imagine if the bank returned the checks two weeks after closing due to insufficient funds. Paying with a cashier’s checks would prevent such a disaster.
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A Cashier’s Check on Request
Even relatively small purchases, such as mail-order retail buys, may reject personal checks. Retailers realize not everyone likes to use credit cards or payment apps, and payments sent via the mail might be the only way to reach these customers. Sellers wishing to protect themselves could stipulate, “Cashier’s checks or money orders only.”
Non-Bank Customers and Cashier’s Checks
Now, there are many sources for money orders, but some may wonder, “Can I get a cashier’s check at any bank?” Individual bank and credit union policies vary, but finding an institution that issues cashier’s checks shouldn’t be too challenging. Such a service is routine, and the banks charge for the service. That said, some banks or credit unions may only provide cashier’s checks to those with an account. Others might be open to issuing cashier’s checks without such requirements. Cashier’s checks typically bear a financial institution’s watermark and feature a bank representative’s signature. Again, such things make counterfeiting the checks much harder.
Protections Against Forgery
Yes, the risks exist that a fraudster could produce a fake checks to make a purchase with it or try to deposit the funds. While anyone pulling such a scam risks felony charges, people might still make an attempt. Those hoping to avoid dealing with such issues could request a cashier’s checks since these checks are much harder to counterfeit.
Other Payment Methods
Those unable to acquire a cashier’s checks could look into certified checks and money orders. For smaller purchases, they may be less expensive and easier to find.
Cashier’s checks offer more guarantees than personal checks because they come from the bank’s funds. Depending on the financial institution’s policies, cashier’s checks may be accessible to those without a bank account.