You may have heard of a cashier’s check before but never really had the need to use them, until now. As you start looking into larger purchases like buying a car or even a house, you may find that you need one to complete the transaction. Here’s a helpful guide on everything you need to know about cashier’s checks so that you’re prepared when the time comes to use one.
What is a cashier’s check?
A cashier’s check is a check that is paid by the bank’s funds, rather than your own, and signed by a bank teller or cashier. These checks are different from your own personal checks because the money is backed by the bank and is considered “guaranteed funds.” Certain banks will refer to them as “official checks.”
Why do you need a cashier’s check?
Using a cashier’s check is typically a personal choice, but they’re particularly useful for larger dollar amounts, especially because there is no upper limit. Because they’re backed by your bank, cashier’s checks may be preferred if you’re putting a down payment on a car or making a security deposit on your new apartment. Not only are these funds reliable, but they may signal to your landlord or car dealership that you’re in good financial standing or may be considered a stable tenant. They also tend to clear more quickly than personal checks; most banks must make a certain amount of funds available within a business day, which is a feature that’s surely appreciated.
Their bank-backing quality makes them safer to use because they won’t bounce or be declined. While there are scams in almost every aspect of the financial world, including cashier’s checks, they contain more security features than personal checks and money orders, minimizing the risk of fraud or theft.
How to get a cashier’s check
Most banks and credit unions offer cashier’s checks to their customers, and some may even extend this offer to those who are not customers. There may be a fee involved, depending on your bank, but the steps to get a cashier’s check issued by your bank are fairly straightforward:
- Have your financial ducks in a row. You’ll need to have some information on-hand before you visit your bank, including the exact amount that the check is being made out for, the recipient’s name, and your own personal identification. Since these checks are backed by the bank’s funds, rather than your own, you’ll need to reimburse the bank for this service.
- Go to the bank. Some banks are embracing online banking services, and you might be able to order a cashier’s check online or by phone. In these cases, the cashier’s check will be mailed directly to your intended recipient, which may take longer. But if you or your recipient cannot wait, you may need to visit a branch of your bank and request one from a cashier.
- The way that the funds are transferred with a cashier’s check may depend on whether or not you’re a client or account holder at the bank. If you don’t have an account with the bank, you may need to bring the entire amount, plus any applicable fees, in cash before the check can be written out. If you do have an account, make sure that you have enough in your account to cover the entirety of the check, plus fees. These are typically frozen in your account until the check is cashed, at which point, the bank will reimburse itself.
- Get a receipt. Ask for proof of payment in the form a receipt. This can be useful for tracking the check in case it isn’t cashed promptly or has gotten lost.
While a cashier’s check is a great way to move large amounts of money around, there are other ways, too. One of the most popular methods is an electronic funds transfer, which is used in wire transfers, direct deposit of paychecks, and ATM transactions. If you’re sending money abroad, a cashier’s check may not be the best option, and you may want to look into an international money transfer instead. One of the easiest solutions for sending money abroad is with Western Union Canada, which allows you to handle everything from your phone on the Western Union Mobile App or through our website. Plus, you can track your transfers in real time so you know that your money has safely arrived at its destination.
