What is a certified check and how do I get one? Is it even safe? Do I have to sign it? And how does it compare to a cashier’s check or money order?
You could have all these questions (and more!) for any number of reasons. Perhaps you’ve been asked to send in a cashier’s check and have no idea what that involves. Or maybe you’ve been given one and aren’t really sure if it’s totally legit.
This is why we’ll take you through everything you need to know about certified checks to make sure you’re fully aware of what’s involved.
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What is a certified check?
A certified check is a type of check for which the bank ensures that there are sufficient funds in the account to cover the value of the check before issuing it. Funds for the certified check are then set aside in the bank’s funds until the check is either cashed or returned to the payee.
A certified check is a type of check that you can cash at any bank, and the funds will be available immediately. Unlike a personal or business check, which takes about two weeks to clear from when they are written until the money becomes available in your account, with a certified check what you see on paper is what’s already there.
For example, a certified check is what you’ll get if your paycheck or tax refund will be deposited directly into your bank account. That said, if you’re planning to issue a certified check yourself, keep in mind that banks typically charge for this service, so it’s important to find out what that fee might cost before you proceed.
Related: Can You Use White Out If You Make a Mistake on a Check?
How do I get a certified check?
The best way to get a certified check is from your bank, using the following process:
- Confirm that your bank can issue certified checks. While some banks only allow you to get these by going to a branch in person, many more banks these days allow you to apply for a certified check online. The instructions below will be for how to do this in person.
- Go to your branch and follow the instructions. This will involve you providing the same information as when you do this online in terms of the amount and payee’s details.
- Present the required identification. You’ll have to present some form of ID to do this to ensure you’re who you say you are when accessing account funds.
- Wait for the funds to be verified and for the teller to stamp your check as being certified. This part will only take a few moments as the system should show the teller straight away if this has been done or not.
- Pay any fees. Not all banks charge fees for certified checks, but some do up to around $15, so you’ll need to have sufficient funds on hand to cover that too.
- Keep the receipt somewhere safe. You should keep the check receipt at least until the check clears. However, if this is for a major purchase, you may want to keep the receipt indefinitely, such as if it’s for the down payment for your home, along with the other documents involved in this transaction.
These steps are all very straightforward and shouldn’t take very long at all.
See step-by-step instructions for how to write a check here.
How can I get a certified check online?
To get a certified check online, you should first check if your bank or credit union offers this. If they do, follow the prompts in the online system. This will involve selecting the account you want to use for this check, adding the amount and completing the payee’s details. Your bank will then mail the check to the recipient.
This can be very quick to do, with only a few clicks needed for this to be issued. That’s because the bank knows who you are, given you’ve managed to sign in to your account, and can see straight away if you have enough cash on hand to cover the value of the check.
Of course, it does mean that you won’t have the check in your hand immediately, as you would if you did this in person. That may not matter to you but if you’re on a tight timeline, consider going into a branch to do this.
Related: Is It Safe to Order Checks Online?
How long does it take to get a certified check?
If you get your certified check in person, it will only take around 10 minutes for you to be issued with this. However, if you order it online, it should be processed in one business day. Make sure though you factor in any time needed to mail the check to the payee.
That is, ordering a check online today doesn’t mean the recipient will receive it tomorrow, so giving a few days for this is usually best.
If you’ve got a bank account, it’s possible to get certified checks through the internet. You’ll still need that physical check on hand for your bank to deposit into your account and process what they call an “accelerated clearing.”
What are the benefits of a certified check?
The main benefit of a certified check is that it’s certain that the funds are available. This is because they involve the issuing bank verifying that there are sufficient funds on hand to cover the value of the check, so it cannot bounce. They’re also very secure, given the bank has confirmed who the payer is.
This means that another advantage is that the funds are immediately available, so you won’t have to wait some time for the check to clear, like with a personal or business check.
Did you know that a check is in the category of “fiduciary money”? Find out more about the four types of money here.
What’s the difference between a certified check and a cashier’s check?
A cashier’s check is a type of check that is drawn on the bank’s funds, not your checking account, meaning the bank’s account details appear on the check. However, a certified check is drawn directly against your personal checking account, and your name and account number appear on the check.
This means that the main difference is what’s attached to the check. A cashier’s check has what you see on paper, and what you have in your account is what there is. However, when it comes to a certified check what you see on paper must match what’s in your account or they’ll bounce.
In addition, a cashier’s check is signed by the bank, whereas a certified check is signed by the payer.
A cashier’s check can be better than what some might call “personal checks,” but they’re not as secure as what a certified check would offer because someone with access to your account could cash it and spend the money.
What’s the difference between a certified check and a personal check?
A personal check is what you’ll get if someone, like your landlord or a utility company, asks for payment from you directly. A certified check would be better in this situation because the funds will become available as soon as it is deposited into what’s called a “demand account” at the bank.
Your landlord might also request that the security deposit on your lease come in the form of a certified check to make sure that what’s written is what’s there.
Your utilities company may request payment via personal or business check as well, but if you owe them and have already paid their bill with another type of check, they might ask for this instead because it will be available immediately. This compares to what you may have deposited before will take two weeks to be available.
Is a certified check safe?
A certified check is considered as being safe because what you see on paper is what’s in your account and no one can take the funds without having access to your bank.
This means that if someone tries to cash it who doesn’t have access to your bank account, they’ll be denied because no money will show up when the bank looks for it
How do I know if a certified check is real?
Just like with any type of check, there are ways to verify what’s real and what isn’t. With a certified check, you can call the phone number on your bank routing slip or ask for an identification card at one of the teller windows. This is usually good enough proof that what you’re holding in your hand is legitimate.
If you withdraw money from your account and a certified check turns out to be fraudulent, you are legally required to reimburse the bank. This is why the certified check is sometimes used by scammers as a tool.
It’s for that reason that you should be careful. In particular, if someone gives you a bank check and tells you to wire them money due to some random story, it’s most likely a check scam. After that, the bank will demand repayment from you. However, the individual who defrauded you will be long gone by this point.
So the main points are:
- You should not cash a check until it has been cleared by the bank.
- You should never agree to deposit a check and then wire money to someone for any reason.
Is a certified check as good as cash?
A certified check is basically as good as cash, because what you see on paper is what’s there. That is, the face value of the check is guaranteed so the amount written on the check is the amount that the bank will honor.
This can be useful when conducting a large transaction, as it may help to reassure you. However, like with any other financial matter, you should exercise caution to avoid being a victim of counterfeiters.
Does a certified check clear immediately?
In order to comply with federal legislation, banks must make funds deposited in an account by cashier’s, certified, or teller’s checks available for withdrawal within one business day of the banking day following the deposit. This is similar to a cash deposit in a bank account, but only if certain criteria are satisfied.
The following are some of the conditions that must be met in order for a certified check to be cleared: The money must be deposited in person to the payee’s own account, and if the bank demands it, on a special deposit slip or envelope. The bank may treat it as a personal check if those criteria aren’t met. Local checks must be available on the second day after deposit, while nonlocal checks must be available on the fifth business day.
Banks may also hold checks beyond this limit for new accounts, when sums over $5,000 are deposited in a single day and under other specific circumstances. On the other hand, banks may have a policy of holding checks for a shorter period than the federal maximum. To see what applies in your case, it’s best to simply ask your bank.
Related: If a Deposit is Pending Can I Use the Money?
Do I have to sign a certified check?
After the bank creates it for you, you will have to sign a certified check as the payer when it is finalized. On the other hand, if you prefer or need to use a cashier’s check, this will be signed by the bank, not you.
As the payee, however, you do not need to sign a certified check.
You may also be interested in: Can Someone Else Deposit a Check For Me?
What’s the purpose of a certified check?
In big exchanges, when the receiver does not know (or trust) the account holder, people frequently use certified checks. Even if the seller could accept a personal check, there are risks, especially in these circumstances where it’s uncertain whether the buyer can pay. When you want to establish trust and confirm that the money is safe, a certified check can give both parties peace of mind.
Certified checks are also used in place of cash purchases on many occasions. They’re ready to roll after they’ve been certified, so you will need some liquid net worth to make this happen.
This means that instead of delivering or mailing cash, you may send a certified check instead. When you need cash quicker, this may be useful since you don’t have to wait for the payment to clear.
What information does a certified check contain?
A certified check sets out the payee, which is the person or business who you’re paying. There are also lines for the date and what the dollar amount is that should be paid out to the recipient. A certified check will also include what’s known as a routing number, which relates to where your bank account is located.
A routing number can also be found on cashier checks or business checks – those that have been purchased from your financial institution in order for them to be able to issue the checks for whatever purpose they want.
Related: Can I Use a Check With an Old Address?
Which is safer: money order or certified check?
A certified check is what’s considered to be the safest, because what you see on paper is what’s in your account and no one can take funds without having access to your bank. With a money order, someone with access could either cash it or alter what was written out by hand.
This means that if someone was given this type of payment in lieu of what you owed them, then they could cash a money order and spend what’s on it.
Does a certified check expire?
Certified checks do not go stale or expire. In other words, you may deposit a certified check and withdraw funds many years later. Nonetheless, state laws about unclaimed and abandoned property frequently make it tough to deal with these checks if the issue date has passed for a long period of time.
To refer to checks that are more than six months old, banking industry professionals use the phrase “stale dated.” Along those lines, each state has banking laws that are based on the Uniform Commercial Code. This code stipulates that banks are not obligated to pay out checks beyond six months of age. However, certified checks, travelers checks, and cashier’s checks are not covered by these provisions and banks must accept them.
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