A cashier's check is a valid alternative to cash, money orders, and personal checks and can be as convenient or as financially dangerous. The number of counterfeit cashier's checks is escalating, and discretion in accepting and cashing them is prudent. However, with reasonable precautions, a cashier's check can be a worthy form of remittance.
Where to Obtain Valid Cashier's Checks
Cashier's checks are also known as teller checks, bank checks, and treasury's checks, to name a few. As the synonyms imply, banks, savings and loans, and credit unions sell legitimate cashier's checks.
Because of the exorbitant rise in forgeries, law enforcement and the US Department of the Treasury strongly advise purchasing them only from the above institutions. Never purchase a cashier's check from any other person or business, even if a prior association exists. If offered a purchase of a cashier's check, often at a "discounted" rate, by another source, contact local law enforcement or the nearest branch of the Secret Service-Counterfeit Unit.
How to Obtain
Unlike personal checks, the funds from a cashier's check are not debited from an account upon remittance demand. They are guaranteed payment vouchers because the purchaser pays the money upfront, not later when it is presented like a personal check.
Most financial institutions require cash or a valid credit or debit card. If the purchaser has an account with the bank, the bank can opt immediately to withdraw funds from that account instead of taking cash. Most institutions charge a fee for purchase; the amount or frequency differs from institution to institution.
The receipt or duplicate copy attached to a cashier's check allows recording of check information. Keep the receipt stub or copy to enable tracking if necessary.
Drawbacks and Dangers
Because of the high number of forged cashier's checks, the far greater risk of using cashier's checks rests on the receiver-the payee noted on the cashier's check, whether it is cashed or deposited. Often, financial institutions will accept cashier's checks only if they meet the following criteria:
The payee has an account in good standing with that institution (without history of overdraws)
The account holder holds sufficient funds to cover the amount of the cashier's check.
While the check cannot be held prior to payment, immediate reimbursement does not guarantee that the cashier's check officially cleared or was not counterfeit. In the event that the bank later discovers that the check was forged, the bank immediately initiates recovery procedures. As preemptive protection, many banks freeze the amount in the payee's account until the cashier's check officially clears, sometimes up to ten business days later.