Are you wondering what the difference is between a cashier’s check vs money order? When you have to make a payment, different merchants have different requirements.
Some accept credit cards, while others will only take cash or checks. But for situations where you need to pay with cash and personal checks are not acceptable, a cashier’s check is the best solution.
Cashier’s checks are most commonly required for real estate and brokerage transactions. However, other merchants may require them as well. In this guide, we’re going to answer the question of, “What is a cashier’s check?” and other important banking information that you need to know about.
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How does a cashier’s check work?
A cashier’s check is an official check issued by a bank. Cashier’s checks draw from the bank’s fund deposits, and they are signed by either a cashier or a teller.
You’ll almost always have to pay for the funds upfront as well as pay an additional fee for the cashier’s check itself. Cashier’s checks are as good as cash because the bank or credit union backs the checks with their own money.
Personal checks draw from the funds in your own bank account, and it can take several days for personal checks to clear. In some instances, if you don’t have enough money in your account to cover the value of the check, it will bounce.
A check that bounces can create payment complications for the person you’re trying to pay, which will result in monetary penalties on your part. Some merchants will want to avoid these potential risks, and they can do that by requiring you to pay via a cashier’s check.
Still don’t fully understand the answer to the question, “What is a cashier’s check?” Not to worry! We’re going to continue to clear up some common misconceptions about cashier’s checks.
Is a cashier’s check the same as cash?
At face value, cashier’s checks aren’t cash because cash is an official currency issued by the government while cashier’s checks are a type of check. They simply instruct the bank to pay a specific amount of money to the recipient of the cashier’s check.
However, cashier’s checks are considered official checks and guarantee payments in the same way cash does. For this reason, many merchants will consider cashier’s checks to be the same as cash for payment and accounting purposes.
How much does a cashier’s check cost?
The cost of a cashier’s check varies depending on the type of bank that issues the check. Most banks charge anywhere from $8 to $15 per cashier’s check. However, some banks may be willing to waive the cost for certain customers. It really depends on your bank’s policy.
What is the maximum amount for a cashier’s check?
Policies can vary from bank to bank. But generally speaking, there’s no maximum amount of money that a cashier’s check can cover.
Are cashier’s checks safe?
Yes. In fact, cashier’s checks are generally viewed as being safer than personal checks. Merchants typically view cashier’s checks as being more secure and less susceptible to fraud. That’s because funds are directly drawn from the bank rather than an individual’s private account, so there’s no chance of the check bouncing or the funds not going through.
How do I cash a cashier’s check?
You can cash your cashier’s check at your bank in the same way you would cash a personal check. At the moment, MoneyLion does not issue cashier’s checks, but you can deposit cashier’s checks into your RoarMoney℠ account using the Ingo Money app.
Example of when you’d need a cashier’s check
There are numerous occasions where you may be asked to provide payment via a cashier’s check. When obtaining a cashier’s check, you’ll have to pay the total amount of money upfront as well as the fee for the cashier’s check itself.
If you need to use a cashier’s check but find yourself running low on cash, consider using MoneyLion’s Instacash℠ as a boost. You could access up to $250 at 0% APR. Just pay back what you’ve borrowed when you get your next paycheck!
In the meantime, here are some common examples of situations in which a cashier’s check may be required.
- Buying a vehicle
- Paying the security deposit for an apartment
- Paying for college tuition or fees
- Making payments to a government entity, such as a town hall or other municipality
- Paying a stranger for a service
Things to consider when using a cashier’s check
Cashier’s checks are generally straightforward. Nonetheless, it’s best to be aware of these factors when using a cashier’s check.
You’ll need to make the payment upfront
It doesn’t matter if you need a cashier’s check for $25 or $5,000. In either scenario, you should expect to have the cash upfront, including the fee for the check itself. Most banks won’t issue a cashier’s check for you unless they’ve received the money from you first.
You’ll have to see a bank teller
You won’t receive a checkbook of cashier’s checks the same way the bank gives you pamphlets of personal checks. Instead, you’ll have to physically go to the bank and meet with a teller in order to obtain a cashier’s check.
Make sure the details are correct
A cashier’s check is an official issue of payment. Make sure you write the exact name of the payee and the amount of money you intend to pay the recipient of the cashier’s check. Include notes on the check detailing what the payment is for.
Expect to show photo ID
Whether you’re requesting a cashier’s check or you’re cashing one, be prepared to show a government-issued ID to the bank teller. If the name on your ID is not the same as the name on the cashier’s check, you might run into issues when attempting to request or cash a cashier’s check.
Advantages of a cashier’s check
Cashier’s checks have numerous advantages. Take a look at some of the most common below.
- Payment is guaranteed with a cashier’s check.
- Cashier’s checks are incredibly secure.
- Payment clears relatively fast with a cashier’s checks.
Disadvantages of a cashier’s check
Cashier’s checks also come with their own set of disadvantages. Here are some of the things you should look out for when accepting or addressing a cashier’s check.
- Despite being the safest type of check around, cashier’s checks aren’t 100% foolproof. Scammers can create authentic-looking replicas of cashier’s checks and it’s not guaranteed that you’ll be able to detect the difference until you try to cash it at the bank.
- There’s no way to electronically generate a cashier’s check. Instead, you’ll have to head into your local bank and speak with a teller every time you want to obtain a cashier’s check.
- Cashier’s checks aren’t free. Some banks will charge anywhere from $8 to $15 per check, which can add up quickly over time.
Cashier’s check vs money order
Cashier’s checks and money orders are both solid options for making a secure payment without paying via cash or a personal check. However, cashier’s checks are more expensive, but they also allow you to pay for larger purchases. Money orders typically max out at $1,000 but cashier’s checks don’t have that limit attached to them.
Use Instacash as a faster means of getting money now
Cashier’s checks are a safe and secure way to make an official payment. They are a way to guarantee that the money is available, putting them in a position where they are viewed as being the same as cash. But that also means you’ll have to have enough cash upfront when taking out a cashier’s check.
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