A bank check can be referred to by many names: cashier's check, official check, teller check or bank draft. All of these names represent the same concept, which is described in the simplest terms by the Encyclopedia Britannica as being a check signed by a bank officer and written by the bank against its own funds. This means that when the person receiving the check cashes or deposits it, the bank will pay the check directly and the funds do not come out of someone's personal account. Bank checks are a common financial instrument and have multiple uses.
A bank check is usually created at the request of customer at a branch of the bank. The customer asks for a bank check made out to a particular person or business, and the check must be paid for before it is created. By collecting cash from the customer or deducting funds directly from his account, the bank is able to guarantee that the funds for the check will be available when someone negotiates it later. The teller will create the check, print it on official bank check stock, and sign it before giving it to the customer. The funds that were collected go into one of the bank's own accounts so that the check can be paid to the person it was made out to at a later date.
There are several purposes served by the bank check. Some merchants request bank checks as payment to be more confident that they will be able to collect their funds when needed. Whereas a personal check written on a person's bank account could bounce, an official check is far more likely to be valid. Bank checks also serve as a means for a person who does not have a bank account to issue a check to pay a bill for which cash is not accepted. In addition, some people do not like to have outstanding checks on their personal accounts, and bank checks are a way to deduct the money immediately and avoid waiting for a check to clear.
A bank check will usually be somewhat larger in physical size than a personal check, and will bear the name and/or logo of the financial institution that issued it in a prominent way. The name of the person who paid for the check does not appear unless it is listed on a line labeled "remitter." Additionally, the check will not bear the signature of the person who paid for it, but rather the signature of a bank employee. Bank checks will usually also have additional security measures, such as fine print, heat sensitive paper or the fact that the word "void" will appear if the check is photocopied.
Cashier's checks have a higher level of acceptance in the financial community than other instruments, such as personal checks. By virtue of the fact that the check is issued by a bank and not by an individual, bank checks are considered to be a safer method of payment than a personal check or a money order. Bank checks are also subject to shorter hold times by banking regulations, so if you are transferring a large sum of money from one bank to another, the receiving bank is less likely to place a long hold on an official check than it would on a personal check.
While bank checks are a great deal safer than personal checks, it is a common misconception that they are indisputably guaranteed funds. Bank checks are generally reliable, but there have been many fraud scams involving fake cashier's checks. To avoid a phony bank check, read the back of the item to find out what the security devices are. Then look for those things--micro-printing, textures--to be sure that the check is valid. If you still are not sure, call the bank that issued the check and it will be happy to verify the validity of the check for you.