What is a cashier’s check? Everything you need to know

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If you’re making a large payment and need a secure way to transfer the funds, you may want to use a cashier’s check.

Cashier's checks offer more security than personal checks, making them preferable in certain situations. Here’s everything you need to know about cashier’s checks, including how to get one and alternative options.

What is a cashier’s check?

A cashier's check is a form of payment guaranteed by the issuing bank.

Unlike personal checks, which draw funds from an individual's account, a cashier's check is taken from the bank's funds. This means the bank itself assumes responsibility for the payment.

But that doesn’t mean it’s free — you’ll still need to provide the necessary funds to cover the check. But because the bank backs up the payment, a cashier’s check never bounces. That’s why it’s considered a more secure form of payment, especially for large transactions.

When do I need a cashier’s check?

A seller will typically ask for a cashier’s check for an extra layer of confidence that the check will clear. It’s often used in transactions where you can’t use a credit card or personal check or when paying in cash is not practical. This includes:

• Large purchases like buying a house or car
• Rent or security deposit payments
• Lawsuit settlements and court-ordered payments
• International transactions
• Gifts or donations

For example, a buyer might bring a cashier’s check to pay for a home's final closing costs. Many parties are involved in that transaction, and the backing of a reputable financial institution is better than your signature (don’t take it personally – it’s a common practice).

Using a cashier's check offers several advantages over other payment methods. It guarantees the availability of funds since the bank verifies the payer's account and sets aside the amount to be paid.

This assurance is particularly valuable when dealing with high-value transactions or unfamiliar parties.

“Because they're seemingly old-fashioned and not very techy, most people don't know about cashier’s checks until it's time to make a large purchase, like a car or home,” says Megan Rork, a real estate broker with Coldwell Banker Realty. “But that's their asset. These checks are much harder to counterfeit, which is an added bonus in a large-sum purchase.”

Most businesses and individuals accept cashier's checks because the issuing bank backs them. This can simplify complex transactions where a large amount of money is involved.

How to get a cashier’s check

To get a cashier's check, you typically need an account with the issuing bank or credit union.

If your bank has a branch nearby, you can go there in person to request a cashier's check. The process is a bit more difficult if you have an online bank. You’ll need to call or request one online and account for additional time for shipping.

Regardless of how you request the check, here’s what you’ll need to do:

1. Know the details for the check: You’ll need to know the payee’s name and the amount of money you need for the check.
2. Show a photo ID: Be prepared to hand over identification.
3. Make sure you have enough money in your account: Unlike personal checks, funds will be withdrawn from your account almost immediately once you request a cashier’s check. The bank or credit union will withdraw the money or place a hold in exchange for writing a check against their funds.
4. Get a receipt: Rork advises to get a receipt in case the cashier’s check is lost or stolen.

How much do cashier’s checks cost?

Cashier's checks typically come with a fee. The amount can vary depending on the financial institution issuing the check. Here’s a rundown of how much a cashier’s check would cost at some of the biggest banks in the country.  

Alternatives to a cashier’s check

There are some situations when you have to use a cashier’s check. But in some cases, there may be other alternatives.

Wire transfers

A wire transfer allows you to send money electronically from your bank account to another bank account. All you need is the recipient’s bank account and routing information.

Like a cashier’s check, it’s a reliable and secure way to send money, and you don’t need to spend time picking up a physical check.

The downside is that wire transfers tend to cost more money. The average fee for a domestic wire transfer is $26.

Money orders

A money order is a prepaid payment form issued by a bank or another authorized institution. It’s also considered a secure form of payment and can be purchased from banks, post offices, or convenience stores. This is helpful if you don’t have a checking account.

But the downside is that money orders come with significantly lower limits. While some banks offer cashier’s checks up to $500,000, most money orders are capped at $1,000.

Online payment services

Various online payment services, such as PayPal, Venmo, or Zelle, offer an easy way to send money electronically. These services allow you to transfer funds from your bank account to another person or business.

However, transaction limits are much lower than a cashier’s check. Zelle limits at top banks range from $600 to $5,000.

The bottom line

Cashier’s checks can be a great way to move a large amount of money. Depending on where you bank, you might be able to get one for free.

But cashier’s checks take some additional time to obtain – whether it means visiting a branch or getting one shipped to your front door. Plan ahead if you think you’ll need one, and weigh the costs against other payment options.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.