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What is the Difference Between a Cashier's Check and a Bank Check?

Autumn Rivers
Autumn Rivers

A cashier's check is one that is already paid for, similar to a money order. It is often also called a bank check, so cashier's checks and bank checks are really just two names for the same thing. Cashier's checks are often preferred to regular personal checks due to increased security. When someone issues a personal check, it is backed by their account, while a cashier's check is backed by an entire financial institution since the bank bought it from the issuer. This makes it a guaranteed payment.

Cashier's checks exist because many individuals and businesses alike are wary of accepting regular checks, since the check writer could conceivably clear out his account before the check clears. When a check is issued, there is no guarantee that the funds are in existence, let alone available immediately. Thus, it is a gamble for the party accepting the check, which is why many people only take personal checks from people they trust.

Cashier's checks draw from an individual's personal funds.
Cashier's checks draw from an individual's personal funds.

By contrast, a cashier's check must be paid for in advance. The person wanting to issue such a check needs to go to the bank and pay for it, and then give it to the recipient. Unless the issuing bank collapses the next day, the cashier's check is guaranteed. In this way, it is as secure as cash, but easier to send in the mail.

There is a price for this security, however. While personal checks only have a one-time ordering fee and cost nothing to issue, cashier's checks can get expensive to buy. The price is often worth it to most people due to the convenience, but because of the extra cost, some people might prefer to write a regular check from their account for free if possible.

Small retail stores may not accept cashier's checks as a form of payment.
Small retail stores may not accept cashier's checks as a form of payment.

Though this method is considered nearly as safe as cash, cashier's check fraud does occur. Similarly to creating counterfeit bills or writing bad checks on purpose, some people make money taking advantage of the trust put into cashier's checks. Such offenders will give others a cashier's check for more than the amount asked for during a purchase, and simply request cash back from the seller.

Cashier's checks, or bank checks, are pre-paid and drawn off of the banks own account, not a personal account.
Cashier's checks, or bank checks, are pre-paid and drawn off of the banks own account, not a personal account.

In such cases, it turns out that the cashier's check is either not valid for the amount reported, or not real at all. Unfortunately it can take banks a few days to realize this, and if it's too late, the check recipient must pay back the bank with money he doesn't actually have. Such examples of fraud usually take place online.

Due to these distinctions, many sellers request a cashier's check as the preferred method of payment when dealing with people they don't know. This works for many general sales. It might be easier to accept a check drawn from a personal account from someone the seller knows, but such trust is not advised online.

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Discussion Comments

sweetpoly

I had cashiers checks in my uncle’s name. When he died I was named the executor of his estate by his children. The checks were stolen from my home by a relative not entitled to them and deposited into an account in another state in another bank. It seems that she filed a small estate affidavit to cash the checks but that is fraudulent because I had the letters of office. So she lied on the affidavit stating she was the sole heir to get the paper work to cash the checks. Now I have to get more attorneys just to make the bank restore the checks. I am so frustrated because everybody involved agrees a crime has been committed because I have the letters of office designated by the children of my uncle and signed by the judge, but no one wants to do anything the police or the bank! Now this cost of getting this back is going to eat up the estate. the checks were in the amount or $26,000.

SauteePan

Cafe41-I agree with you on that. I have even seen that some property owners have requested a check money order probably because of the reason that you suggested.

My bank does not charge a check fee for money orders or cashier’s checks. It really depends on the type of account that you have, because they do charge different account holders fees for these services.

Those are usually accounts that fall below a certain minimum balance.

cafe41

When I rent out my vacation home, I only accept cashier’s checks for rental payment. When someone is sending you checks in the mail in this fashion, this is really the best protection because you do not know if the tenant’s check is going to bounce.

This way you know that depositing checks like this into your account will not be a problem. I also know who is serious about booking the vacation and who is not.

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    • Cashier's checks draw from an individual's personal funds.
      By: fotopak
      Cashier's checks draw from an individual's personal funds.
    • Small retail stores may not accept cashier's checks as a form of payment.
      By: pressmaster
      Small retail stores may not accept cashier's checks as a form of payment.
    • Cashier's checks, or bank checks, are pre-paid and drawn off of the banks own account, not a personal account.
      By: Pefkos
      Cashier's checks, or bank checks, are pre-paid and drawn off of the banks own account, not a personal account.