A cashier’s check clears immediately if you cash it at the issuing institution.
More Info: If you deposit a cashier’s check the same rules apply that apply for any negotiable instrument under the individual regulations of your bank. Because the incidence of fraudulent cashier’s checks is increasing, many banks are adopting stricter cashing policies. In many instances, funds are being held until the cashier’s check clears the issuing bank. If your bank does make funds available to you prior to the check clearing, you are still responsible if the check does not clear, and your account will be charged accordingly.
What Does It Mean for a Check to Clear?
When a check clears, the necessary funds are available in the account of the person who wrote the check. In the event that all of the funds are not available, the check will bounce or be returned. Checks that bounce are usually called “bad checks” and there is the possibility that the person who wrote the bad check will face criminal charges. Whether it is considered a felony or misdemeanor depends on both the amount of the check and the state laws. Sometimes banks will supply the missing funds but at a fee to the customer. Banks may also charge a fee for a returned check.
How Does Check Cashing Work?
The way check cashing works is that the check must first be made out to the person who wants to cash it. The check must be endorsed in order for it to be cashed. To endorse a check all a person has to do is sign it on the back. The money from a check can be received in the form of bills or it can be deposited into an account. Checks can be cashed at a bank or at a money center. In the case of banks, the person seeking to cash the check must be a member of that bank. In both cases, it’s a good idea to bring some form of identification.
“Answers about Funds Availability.” Help and Frequently Asked Questions about National Banks from OCC’s HelpWithMyBank.gov. N.p., n.d. Web. 29 June 2011. <http://www.helpwithmybank.gov/get-answers/bank-accounts/funds-availability/faq-banking-funds-available-05.html>.
Chu, Kathy, and USA TODAY. “Banks’ check-clearing policies could leave you with overdrafts – USATODAY.com.” News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World – USATODAY.com. N.p., n.d. Web. 7 July 2011. <http://www.usatoday.com/money/industries/banking/2006-11-19-bank-usat_x.htm>.
“Check Cashing Answers from the OCC.” Help and Frequently Asked Questions about National Banks from OCC’s HelpWithMyBank.gov. N.p., n.d. Web. 7 July 2011. <http://www.helpwithmybank.gov/get-answers/bank-accounts/checks-cashing/bank-accounts-cashing-checks-quesindx.html>.