What Is a Cashier's Check? How to Buy One, Definition and Cost

A cashier’s check is often necessary for big purchases, like the down payment on a home. This is because a cashier’s check is drawn from a bank’s account and is therefore as highly regarded as cash. You can’t bring a regular personal check to a home closing because the seller will be handing over the deed to the house, leaving no time for the check to clear. For smaller transactions, vendors will often accept a money order, which is another form of guaranteed payment. If you’re looking for guidance on making large purchases or seeing how you can work saving for a home or other purchase into your financial plan, consider working with a professional financial advisor.

What Is a Cashier’s Check?

Cashier’s checks, also known as teller’s checks, are checks that draw on the bank’s own funds to make the payment. They’re as good as money in the bank because, well, they are the bank’s money in the bank. Once a bank creates a cashier’s check, the bank guarantees to pay the amount printed on the check. A legitimate cashier’s check will not bounce.

To get a cashier’s check, you need to bring the cash to the bank. Or if you have an account there, you need to have the amount in your account and the bank will withdraw it, moving it to the bank’s own account. The money will then be available when the payee cashes the check.

A cashier’s check is different from a personal check because the money is drawn from the bank’s account. With a personal check, the money is drawn from your account, which may or may not have enough money to cover the check. Also, once a cashier’s check is complete, it is difficult to cancel. With a personal check, you just rip it up or call the bank to stop payment.

When to Use a Cashier’s Check

People often use cashier’s checks for large purchases where it’s not practical or feasible to bring cash. Buying real estate is a good example because you wouldn’t hand over such large amounts of money without receiving the deed right away. But the seller wouldn’t hand over the deed without a form of payment that has a guarantee. Since a financial institution’s account backs a cashier’s check, a cashier’s check is one of the securest forms of payment.

Cashier’s checks are also useful in time-sensitive transactions. The funds are usually available immediately—in most cases, the next day. If you’re looking to make a big money purchase, a cashier’s check may be the quickest and safest way to go.

Here are some other good purposes for a cashier’s check:

For a down payment on a home.
Paying closing costs when buying real estate.
To purchase land.
To buy a car with cash or for a downpayment.
To buy a boat with cash.
To invest in a business.
When paying large amounts of taxes owed.
When making a large college tuition payment.
When paying a wedding planner for the entire wedding costs.

Many situations might be the safest with a cashier’s check but it doesn’t mean that you have to use one. There are alternatives that you can explore to see if there are better options for your situation.

Where Can I Get a Cashier’s Check?

You can purchase a check from a bank teller or through your bank’s online system, for banks that offer that service. You’ll need identification and other relevant information – the amount of the check, the correct spelling of the payee’s name and any memo notes. This info is printed on the check – you can’t add anything in handwriting. You also can’t cross out anything.

If you have an account with the institution, the amount you request comes out of your personal account and goes to the bank’s own account. If you don’t have an account with the bank, you may be able to pay with cash. Once the teller prints and signs the check, it’s ready for use.

Keep in mind that some banks sell cashier’s checks only to their customers. So if you don’t have a bank account, you should call before going to any bank to make sure they will issue you a cashier’s check.

The process of getting a cashier’s check at a credit union is similar. One difference, though, is that you can usually get a cashier’s check from almost any credit union, whether or not you’re a member.

The last option is to order a cashier’s check online. This varies from place to place, but most banks will only offer this option to their customers. When you request a cashier’s check online, the bank will send a physical check to your mailing address. That makes it your responsibility to get it to the recipient. This does save you a trip to the bank, but it will still take longer since you have to rely on the mail.

Risks of Using Cashier’s Checks

Cashier’s checks offer a safe method of payment. Security features printed onto the check prevent any possible forgery. But counterfeiting scams do still occur, often where the victim receives a cashier’s check in the mail from an unknown person, who then asks the victim to send some of the money back.

A fraudulent cashier’s check will likely clear immediately when first deposited. This is because the bank has guaranteed that the funds will be available. But when the bank discovers that the check is a forgery, often a few weeks after the deposit, they take the money back. Unfortunately, the recipient is out of pocket for any money that has been spent.

Because of this, you should take extra precautions with a cashier’s check that a stranger sends to you as a gift, reward or unexpected refund. Show it to a teller to certify that the check is legitimate. If you are really concerned, you could also wait several weeks to make sure the check has cleared before you spend any of the funds.

How Much Does a Cashier’s Check Cost?

There aren’t a ton of situations in your life where you’ll need a cashier’s check. However, that means that they typically don’t come free. While cashier’s check fee rates usually aren’t more than a few dollars, they aren’t given to you like a typical checkbook.

For instance, at many of America’s largest banks, fees top out at around $10 – $15, including these rates:

Wells Fargo: $10
Citi: $10
Bank of America: $15
Chase: $10
Santander Bank: $10
U.S. Bank: $10
Capital One: $20 online, $10 at a branch
BBVA: $10
PNC Bank: $10
Ally Bank: $0 (official bank check)
Discover: $0 (official bank check)

Some online banks will offer something similar to a cashier’s check for free called an official bank check. You should check directly with your bank to see what the cost might be.

Alternatives to a Cashier’s Check

There are a few options for those that don’t want to pay the fee for a cashier’s check but some of the alternatives have a separate fee. You’ll need to check directly with your bank before moving forward. Here are the three most common alternatives:

Money Order: Perhaps the most viable alternative to a cashier’s check is a money order, another form of guaranteed payment. They’re usually more readily available since you can purchase them from banks, post offices and some retail stores. You can buy a money order with cash or a debit card. Just note that money orders tend to have a cap amount of $1,000. Cashier’s checks don’t have these limits, making them more useful for larger payments. Depending on the size of your purchase, money orders may be more convenient.
Certified Check: You could also consider certified checks. When making a certified check, the bank guarantees that the payer has enough funds in their personal account to cover the check. The bank freezes the amount until the check is deposited. But unlike a cashier’s check, the bank does not take on the payment itself. The funds are drawn from the personal account of the payer. The bank’s role is to guarantee that the payer is financially able to make the payment.
Wire Transfer: Lastly, you can look into wire transfers. This usually involves sending money from one bank account to another. You can make wire transfers online or at a bank branch if you want to pay in cash. To make the transfer, you’ll need to know the recipient’s bank, routing number and account number. The recipient can access the money almost immediately, making it a good option for long-distance payments.

Bottom Line

Cashier’s checks offer a secure method of payment for large amounts. They come with almost immediately available funds and little risk of check bouncing. These guarantees make cashier’s checks the payment method of choice for large purchases. If you are buying a house, your lawyer will likely tell you to bring the down payment as a cashier’s check to the closing.

Tips for Managing Money

There are many factors that go into managing your money, and the help of a professional can help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Focus on creating an emergency fund. Experts generally recommend having three to six months of expenses in on-hand cash. The idea is to have a cushion in case you lose your job. However, an emergency fund is also useful for the times you need to cover a shortfall, like a larger-than-normal credit card bill or an unexpected medical bill.