What Is a Cashier’s Check?

A cashier’s check is a secure way to make large payments. The check itself is written by a financial institution such as a bank or credit union against its own funds. When you request a cashier's check from your bank, money is moved out of your account and into the bank's account, and then a bank representative (usually a teller) signs it over to a named third party. (The check will include the names of both the recipient and remitter.) A customer who purchases a cashier’s check pays for the full face value of the check and generally also pays a small premium for the service.

In some scenarios, the benefits and protections that a cashier's check offer make it a better choice than a personal check.

How Cashier’s Checks Work

An individual can use a cashier’s check instead of a personal check to guarantee that funds are available for payment. A cashier’s check is secure because the individual must first deposit the amount of the check into the issuing institution’s own account. The person or entity to whom the check is made out is guaranteed to receive the money when cashing the check. A cashier’s check is typically associated with a large payment that warrants extra protection. For example, you might use a cashier’s check to:

• Make a down payment on a home
• Pay closing costs for a mortgage
• Buy a car or boat
• Purchase a piece of land

In other words, they’re not generally used for everyday spending. Cashier’s checks provide a number of advantages. The payee—the person receiving the funds—knows that the check won’t bounce, as it’s being drawn from the bank’s account. Because cashier’s checks usually have watermarks and require signatures from one or more bank employees, the bank has a reassurance that the check won’t be counterfeited. You don’t have to worry about sharing your personal checking account information with the payee, as the check isn’t drawn from your account. Finally, the funds are usually available by the next business day. With a large personal check, the bank might place a hold of several days to allow the check time to clear.

Always get a paper or digital receipt for a cashier’s check. Your receipt verifies proof of payment, and it’s something you’ll want to have if a cashier’s check is lost or stolen. If it is, you can ask the bank to reissue the check. However, the bank may ask for an indemnity bond first, which makes you liable for the check’s replacement. And it’s not an instant process. Depending on the bank, you may have to wait 30 to 90 days to receive a replacement cashier’s check.

Cashier’s Check vs. Other Forms of Payment

Some banks will only issue a cashier's check to someone who has an account with that institution. If you can't get a cashier's check, or if a payee won’t accept one, there are other options for making large payments that offer varying levels of safety.

Traditional Checks

The bank does not guarantee traditional checks. If there are not sufficient funds in the remitter’s account to cover the draft, the bank can return the check. As a result, the payee receives no funds from the bad check. Cashier’s checks remove this element of risk.

Money Orders

A money order isn’t a check, but it is a secure form of payment. You purchase the money order for a specific dollar amount and write it out to the payee. They take it to the bank and either deposits it or cashes the check.

Compared to a cashier’s check, a money order may be less expensive. The United States Postal Service, for example, offers small money orders for less than $2. They’re also more convenient to get, as you’re not limited to finding them at banks and credit unions. You can purchase money orders at the post office, supermarkets, and some gas stations. And you don’t need a bank account to get a money order; you just need to have the cash to cover the money order and the fee.

Certified Checks

Certified checks are like cashier’s checks, but they’re drawn directly against your account. It’s essentially still a personal check, but it’s signed by both you and the bank. The bank guarantees a certified check and may put a hold on some of the funds in the account holder’s account, but it doesn’t move the funds from that account to its own reserves. However, if there are insufficient funds in your account to cover the certified check, you’ll have to pay any associated fees the bank charges.

One difference between a certified check and a cashier's check is that the former may be a less secure form of payment. These checks may not have the same watermarks, making them easier to duplicate. In general, though, a certified check is still a more secure way to pay than a money order or a personal check.

Wire Transfers

With a wire transfer, money is sent electronically directly from your account to someone else’s, with no check needed. It’s a low-stress way to send money, but there are some downsides.

Wire transfers can be more expensive than cashier’s checks, certified checks, or money orders. Institutions may also charge a fee to receive a wire transfer. The other primary drawback is that wire transfers aren’t always instant. It can take several days for an international wire transfer to be completed, which may not be convenient for your payee if the money is needed quickly.

Social Payment Apps

Social payment apps may be useful for sending money to friends and family. With these apps, you can send money to someone’s email address or phone number by using your bank account, debit card, credit card, or a balance you have in the app. Transfers can be instant and—depending on where the money for the transfer comes from—you may pay zero fees.

Some apps limit how much you can send in a single transaction and per day. If you have a large amount to send, you may be better off looking at a cashier’s check or one of the other options mentioned above.

Downsides of Cashier's Checks

As noted earlier, cashier's checks may come with higher fees than personal checks or some electronic transactions, making them less convenient for smaller transactions or microtransactions.

Cashier's checks also require a bank account or upfront payment, making it difficult to obtain a cashier's check if you don't have one. Limited usage or acceptance is also possible, as some individuals or businesses may not accept cashier's checks due to authenticity concerns or delays in verifying funds. Risk of fraud is also high with cashier's checks, as counterfeit cashier's checks can be created by scammers.

Last, cashier's checks are non-refundable. This means you may not be able to get a refund for the funds used to purchase them. To avoid unnecessary expenses, it's essential to be certain about the payment before obtaining a cashier's check.

Examples of Cashier’s Check Scams

Although cashier’s checks are a low-risk way to transfer money, thieves have developed a number of scams centered on them. In one, a buyer contacts someone who is selling something and offers to buy it with a cashier’s check written for a higher amount than the sale price. They ask the seller to wire the difference to another party. After the seller wires the money, they try to deposit the cashier's check and learns that it is fraudulent. In another popular scam, the victim receives a letter stating they are selected to work as a mystery shopper. The letter contains a cashier’s check, and it instructs the victim to use part of the check to buy merchandise during the mystery shopping excursions, wire part of the check to a third party, and keep the remainder as pay. To be successful, the scam relies on the victim wiring the funds before discovering the cashier’s check is a fake.

The Bottom Line

A cashier's check is a secure payment instrument issued by a bank or credit union. It guarantees payment to the recipient using the institution's funds, making it similar to cash. Unlike personal checks, cashier's checks are drawn on the bank's own account rather than the payer's account, ensuring immediate availability of funds. They are widely accepted for large transactions such as real estate purchases.