What is a cashier’s check and when should I use one?

Man looking at check and holding a pencil.Image: Man looking at check and holding a pencil.

In a Nutshell

Cashier’s checks are issued by your bank or credit union and allow you to transfer a large amount of money with both you and the recipient being able to trust that the check is good. But you’ll have to pay a bit more than the face value of the check in order to take advantage of the speed and security of a cashier’s check.
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If you’re making a big purchase (or a big sale) and want your money to be secure, a cashier’s check might be a good choice.

You have many options for making a big-ticket purchase or receiving a big payment, from money transfer apps to debit cards to good old-fashioned paper checks. But when speed and security matter most, a cashier’s check might be the best way to go. Cashier’s checks allow you to transfer large amounts of money with confidence on both sides that the check will be good.

We’ll help you understand how they work, how they differ from other payment forms and when you might want to use one.

What is a cashier’s check?

A cashier’s check is a check issued and backed by a financial institution that you can buy to use to make a purchase.

The financial institution takes the money from your account for the face value of the cashier’s check, plus a fee, and issues the check. The check is backed by the financial institution, rather than by your personal account, so anyone you’re paying with the cashier’s check can be more confident it won’t bounce.

When should I use a cashier’s check?

A cashier’s check can be a good option when you need to pay a large amount of money for something and want extra security. Since cashier’s checks are guaranteed by the bank that issues them and clear quickly, they’re also good for transactions where you and the seller don’t know each other very well.

Here’s an example: Say you’re moving into an apartment owned by a local landlord. The landlord asks for a security deposit of two months’ rent. That’s a hefty sum of money, and you don’t want to use cash. The landlord has no way to accept payment online or with a card and isn’t willing to take your personal check.

You can go to your bank or credit union and request a cashier’s check to make that payment to your new landlord more safely.

How do cashier’s checks work?

Typically, a customer requesting a cashier’s check will go to their bank and pay the bank the amount of the check they need, plus a fee. You can pay cash, or the bank can take out money from your account.

The bank then issues a cashier’s check made out in the payee’s name, for the amount you request.   

When your bank prints the cashier’s check, your money is transferred from your account to a secure account at the bank. The bank then pays the recipient when they cash or deposit the check.

Is there a maximum amount for a cashier’s check?

There’s often no limit on a cashier’s check, provided you have the money for it. Some banks do impose a maximum amount if the check is ordered online. This limit can range from $2,500 to  $250,000 per check or more.

Can I cash a cashier’s check if I don’t have a bank account?

Yes. Banks generally will allow you to cash a cashier’s check without an account there, but they will charge a fee. You can also cash a cashier’s check at a limited number of national retailers, including Walmart.

Do cashier’s checks get reported to the IRS?

 The IRS requires you to use IRS Form 8300 to report when you receive cash in excess of $10,000 from a single source. And the IRS treats cashier’s checks of $10,000 or less as cash. Cashier’s checks of more than $10,000 are not considered cash — so they don’t need to be reported on Form 8300.

Your cashier’s check may also need to be reported on Form 8300 if you use it in combination with cash in a transaction of larger than $10,000.

And keep in mind that the IRS generally wants to know about all your income. So, for example, if you realize a gain from selling an asset and the buyer pays you with a cashier’s check for more than $10,000, you may still be liable for capital gains tax – and you’ll likely need to report the income when you file your federal income tax return.

How and where can I get a cashier’s check?

You can get a cashier’s check at most financial institutions, including banks and credit unions. Some banks will require that you be a customer there to get a cashier’s check, while others may not.

You can’t get a cashier’s check at a post office or retail store.

How much does it cost to get a cashier’s check?

Banks usually charge a small fee for a cashier’s check, often around $10 but possibly more or less. Some banks offer free cashier’s checks for customers with a qualifying checking or savings account.

Are cashier’s checks safe?

Cashier’s checks are considered one of the safest ways to make a big purchase. The person you’re paying can feel secure because the money is guaranteed by the bank that issued the cashier’s check. They don’t have to worry if there’s enough money in your account to cover it, like they might if you wrote them a personal check.

Banks also use security features like special designs and types of paper to make it difficult to counterfeit cashier’s checks.

What happens if I lose a cashier’s check?

A cashier’s check is as good as cash — and losing one is just as bad as losing a stack of cash. If you lose a cashier’s check, you may be able to get a replacement from the financial institution that issued it, but you’ll have to follow a process designed to protect the bank from liability.

To get a replacement for a lost cashier’s check, your bank will likely require you to sign a statement swearing that your check is lost and pledge to repay the bank if the check is properly cashed in the future.

Some banks will require you to buy an indemnity bond. The bond acts as an insurance policy to ensure that you (not the bank) are on the hook if the lost check turns up and someone cashes it successfully. In this situation, the bond would cover the bank’s loss for you.

You should always contact your bank immediately if your cashier’s check is lost or stolen. It could take 30 to 90 days before the bank issues a replacement check.

How is a cashier’s check different from a personal check, certified check and money order?

There are several other ways to transfer money more securely than cash.

  • A personal check is a standard feature of a person’s checking account that allows you to fill out a slip of paper — the check — with a person or business you want to send money to and the amount. The recipient can take this check to your bank, and the money is drawn from your personal account. They’re different from cashier’s checks because they aren’t guaranteed.
  • A certified check is a type of personal check where the check-writer’s bank verifies that the check is good. The bank makes sure there’s enough money in the account it’s drawn on and that the signature is valid. While more secure than a personal check, a certified check is still drawn on your personal account, unlike a cashier’s check.
  • A money order is the closest thing to a cashier’s check. It’s also pre-paid and guaranteed by the company that issues it. You can get these at a U.S. Post Office and many retailers like Walmart as well as financial institutions, and they tend to be cheaper than a cashier’s check. But there is a $1,000 limit for money orders.

Next steps: How to avoid cashier’s check fraud

While cashier’s checks are generally secure, fraud is still possible. Sophisticated counterfeiters can print up invalid cashier’s checks and pass them off as good. Most cashier’s check fraudsters will send you a bad check and ask you to wire them money or send them items in return. Only later do you discover the cashier’s check is fraudulent.

These counterfeit checks can often appear real. Here’s what to do if you have concerns about a cashier’s check.

  1. Call or visit the bank or credit union listed as the issuer and see if you can verify its authenticity. Don’t use the number on the check — research the bank listed yourself and use an official number.
  2. Don’t accept a cashier’s check for more than the purchase price of your item.
  3. Don’t trust that the cashier’s check is valid until it clears.

If you believe you’ve been given a fraudulent cashier’s check, here’s who you should contact.

About the author: Andrew Dunn is a veteran journalist with more than a decade of experience as a reporter and editor at North Carolina news organizations, including the Charlotte Observer and the StarNews in Wilmington. In those roles,… Read more.