Learn More About a Cashier’s Check

What is a Cashier’s Check? 

The term cashier’s check is commonly used in the financial world, but don’t feel bad if you don’t know what that means. A cashier’s check can sometimes be known as “an official check” that is issued and guaranteed by a bank. An individual requests a cashier’s check for $100 and pays that amount. Then, the bank issues a check in that amount for a designated payee. 

The check cannot be cashed by anyone but the designated payee. When you obtain a cashier’s check, you typically have to pay the amount of the check upfront, plus any applicable fees. The amount is drawn from the bank’s funds and is on hold until the check is presented for payment and cashed.

Once the payee receives the cashier’s check, they can be sure that the funds are guaranteed by the issuing bank, which means the check will not bounce. This makes cashier’s checks a safe and secure payment method for both the payee and the payer. Basically, you can use it instead of a debit card, credit card, personal check, or cash. 

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What are Cashier’s Checks Used For? 

The check has a high level of security, so it is typically used for large transactions that require a secure payment method. It is considered an “official” check because it can’t bounce. 

You can use a cashier’s check to purchase a car from an individual seller, pay for a large expense, or handle a legal settlement. You can even use them for business transactions, rent payments, or real estate transactions! 

cashier's check

It’s worth noting that some institutions may have restrictions on how you can use a cashier’s check, so it’s always a good idea to check with the financial institution issuing the check to ensure that it will be accepted for the transaction you have in mind.

How Does a Cashier’s Check Work?

Cashier’s checks are only issued if it is signed by you and you were able to provide the exact amount of funding that is on the check. All you will need to do is head to a bank, request a cashier’s check, pay the applicable amount, and then the money will be drawn from the bank’s funds.

It’s an easy process that usually doesn’t take more than 10 minutes at your local bank. 

Is there a Fee?

Yes, there may be a fee for issuing this type of check. Most banks charge a small fee for issuing a cashier’s check, typically less than $10. 

Cashier’s Check vs. Money Order

signed a cashier's check

A cashier’s check gives you a way to pay if you don’t have a credit or debit card. Cashier’s checks can be great if you need to pay someone a large amount of money in a secure way. 

But, what is the difference between a cashier’s check vs. a money order? Money orders are a different way of paying for something. A money order is a prepaid check that does not require the individual to have a bank account. A money order can only be cashed by the designated payee. So if you need to send money to someone, it might be the route to go. Money orders are prepaid, and the funds are guaranteed. So money orders also can’t bounce. 

Money orders are available at convenience stores and other local places. When you buy a money order, you’ll need to fill out some information, including the recipient’s name and the amount you want them to pay them. Then you’ll prepay the full amount plus a small fee. The recipient can then cash the money order just like they would a check. Depending on where the recipient cashes it, there might also be a fee for them.

The Facts 

  • Cashier’s checks and money orders are prepaid. 
  • Cashier’s checks and money orders are both paid upfront, so they can’t bounce.  
  • Cashier’s checks typically don’t have limits like money orders
  • Money orders are typically for small purchases, unlike cashier’s checks
  • Money orders are available at convenience stores and other local stores.
  • Cashier’s checks are usually only available at banks and credit unions.
  • Cashier’s checks may have higher fees than money orders. 

Both cashier’s checks and money orders provide more security than personal checks or cash, but the key differences between them are the fees, maximum amount, and where they can be obtained.

Cashier’s check or money order… The choice is yours! Click here to stay updated on the latest in the financial world, or click here to learn more about online banking with Chime, a partner of Max Cash. 

Online banking with Chime is a fast and convenient way to get access to all the benefits of a bank without having to go to a physical location.

By Z. Garcilazo

Z. Garcilazo is a financial writer for the Max Cash team with over 2 years of experience in the financial services industry. She has a passion for finance, and routinely authors blogs about budgeting, banking, and more.