A cashier's check is a check that's written against its own funds, so it's very unlikely to bounce. They're commonly used for big purchases of things like vehicles and real estate. If you have a bank account, it often makes sense to get a cashier's check from a bank where you already do business. Some, but not all, banks will issue a cashier's check to a non-customer for a fee.
How Cashier's Checks Work
An ordinary personal check is a legal document that tells your bank to pay the amount written on the check to the person named on it. While it's illegal to purposely write a check knowing you don't have the funds in your account to pay it, it's not uncommon for checks to bounce, or fail to be backed by sufficient funds. That means that there's a risk in accepting checks as payment, since you may have to chase down the person who issued the check if it bounces.
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In some cases, you can get around this risk problem by demanding payment in cash, but that's often not practical for big purchases such as real estate, cars and other expensive items. Another alternative is to require payment with what's called a cashier's check or bank check. A cashier's check is a check drawn against the bank's own funds rather than an individual account holder's, so it's very unlikely to bounce and can often clear faster than a traditional personal check.
Cashier's Check With No Bank
Many banks and credit unions will happily issue cashier's checks for customers, usually for a small fee. Simply tell a bank representative who you need the check made out to so that the bank can transfer money from your account into the bank's own account and issue the check.
If you can't make it into a bank branch, you may be able to have a cashier's check sent to you. Postage or delivery fees might then apply. For example, you can get a Wells Fargo cashier's check for a $10 fee, but you must pay an additional $8 delivery charge if you order the cashier's check online. Some banks offer free cashier's checks in certain circumstances.
If you don't have a bank where you regularly do business, it can be more difficult to get a cashier's check. Some banks and other financial institutions only issue cashier's checks to customers, which means if you don't have an account, you may be out of luck. Call banks near you to see if one will allow you to purchase a cashier's check without an account. You will generally need to pay cash for the cashier's check if you don't have an account where the funds can originate.
Opening a Bank Account
You can also open an account at a bank in order to take advantage of services it only offers to customers, including purchasing cashier's checks. Keep in mind that it can take some time for non-cash deposits at a bank to clear, so if you are depositing a paycheck or other check to fund your account, the money may not immediately be available for withdrawal via a cashier's check or other means. Contact banks near you to understand their funds availability policies for new accounts, including how they relate to cashier's checks.
Closing an Account
If you are unsatisfied with your current bank, moving out of its main service area or otherwise wish to close a bank account, you will want to receive the money that you have in the bank. If you only have a small balance, you can just request it in cash, but if you have a larger balance, it may not be practical or safe to request it in cash. In that case, you can often request that the bank issue you a cashier's check payable to you for any remaining funds. You can then take that check to another bank where you do business or wish to open an account.
It's also sometimes possible to remove all the funds from your account by writing yourself a check and depositing it in another bank, or transferring the funds through digital banking apps. But depending on the terms of your account, you may risk triggering minimum balance fees or not properly emptying the account if interest is due to be credited.
If you truly wish to close your account and move all funds, it's often easier to explicitly do so with your bank's assistance.
Cashier's Check Vs. Money Order
An alternative to a cashier's check is what's called a money order. This is a document that looks very similar to a check but is completely prepaid, so like a cashier's check, it is unlikely to bounce. They're sometimes used for paying for large purchases like cars or apartment deposits, especially to parties you haven't done business with before, and they're also used by people without bank accounts in lieu of checks.
You can get money orders from many different businesses, including supermarkets, convenience stores, drugstores and check-cashing stores. They usually issue the money order through a money transfer business such as MoneyGram or Western Union. The United States Postal Service and other post offices around the world also issue money orders.
In many situations where a cashier's check is needed, a money order will also do. Verify with anyone you are paying that they will accept a money order rather than a cashier's check before you purchase one.
Handling Money Orders
You generally must pay for a money order with cash, providing the full cash value plus a fee to the organization that issued it. Many organizations that sell money orders also have ATMs on site if you have a bank account or prepaid card you can withdraw money from. Many also cash checks, so you can potentially cash your paycheck or another check and then buy a money order in one stop.
Once you have a money order, carefully address it to the intended recipient. Keep the money order safe and hold on to the receipt that came with it. You may want to take a photo of the receipt so you have a duplicate copy, as you will need the information on it if the money order is lost or stolen or you wish to see if it is cashed.
If the money order is lost, stolen or damaged, contact the company that issued it immediately. You can often get it reissued or refunded, but there may be a fee and there may be a delay while the company verifies that, if it was cashed, it was in fact stolen and cashed by someone unauthorized.
If you receive a money order, you can usually deposit it as you would deposit a check or take it to a representative of the organization that issued it to cash it.
Understanding Certified Checks
Another type of checks called certified checks can function similarly to cashier's checks. Certified checks are personal checks where a bank guarantees, or certifies, that the money is present in the account on which they are written, usually by setting aside that money until the check is cashed. Certified checks can be a fine alternative to cashier's checks for people with bank accounts, but they're usually not useful for other people because they have no checks to certify.
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