Cashier's Checks (2024)

FAQs

What is the downside of a cashier's check? ›

Downsides of Cashier's Checks

Risk of fraud is also high with cashier's checks, as counterfeit cashier's checks can be created by scammers. Last, cashier's checks are non-refundable. This means you may not be able to get a refund for the funds used to purchase them.

They're guaranteed. Unless a cashier's check is fraudulent, there's almost no risk that it will be declined, or "bounce."

Generally, if you make a deposit in person to a bank employee, then the bank must make the funds available by the next business day after the banking day on which the cashier's check is deposited.

Yes. If you deposit in a bank more than $10,000 cash (meaning actual bills or cashier's checks) at a time, the bank must report this to the IRS. If you withdraw more than $10,000 in cash or cashier's checks, the bank must also report this.

Cashier's checks are typically used for larger purchases. Although the policy may change from bank to bank, generally there's no upper limit for a cashier's check. The payee typically has quicker access to a larger amount of the funds with a cashier's check.

One of the most important factors is the endorsem*nt of the check. Endorsem*nt refers to the signature on the back of the check, which confirms that the person cashing the check is the rightful owner. Without proper endorsem*nt, it can be difficult, if not impossible, to cash a cashier's check.

Theft or fraud are examples of reasons for canceling a cashier's check.

Call or visit the branch of the financial institution on which the check is drawn on. The financial institution should be able to help you determine whether or not the check issued is genuine. Don't trust the phone number for the financial institution listed on the check, it might be fraudulent.

Assuming that your question refers to holds under Regulation CC, a hold may be placed on funds deposited in the form of a cashier's check into an account of a payee of the check, if the amount of the check (and any other "next day" checks being deposited) exceed $5,000.

You can contact the issuing bank to confirm the funds are available and have not been frozen or withdrawn. Monitor your account: After receiving a cashier's check, it is essential to monitor your account to ensure the funds have been deposited.

Who signs the back of a cashier's check? ›

The remitter signs the back of the check before it can be converted into cash. For a cashier's check to be valid, a signature from the issuing agent, such as a teller or its employees from the bank or credit union, signs the check. The check indicates the names of the recipient and the remitter of the check.

Here's how long it generally takes for a check to clear: Usually within two business days for personal checks but up to seven for some accounts. Usually one business day for government and cashier's checks and checks from the same bank that holds your account.

Note that under a separate reporting requirement, banks and other financial institutions report cash purchases of cashier's checks, treasurer's checks and/or bank checks, bank drafts, traveler's checks and money orders with a face value of more than $10,000 by filing currency transaction reports.

Rule. The requirement that financial institutions verify and record the identity of each cash purchaser of money orders and bank, cashier's, and traveler's checks in excess of $3,000.

Be suspicious if the cashier's check is made out for an amount higher than the asking price and you are asked to transfer the excess amount to another bank account. Be especially cautious if the purchaser is long-distance or if you are dealing with them over the Internet.

If you need a cashier's check on a regular basis, you should find a bank or credit union that offers them for free to account holders. Online banks such as Ally Bank and Discover, for example, offer free official bank checks.

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.

Cashier's checks are a great option for large-dollar transactions or for when you conduct business with people or companies you don't know well, such as when you buy or sell a car. Occasionally cashier's checks are required in real estate or broker transactions because of the large dollar amounts involved.