- Personal Finance
How Cashier's Checks Work and Other Bank Checks
Different Checks for Different Needs
There are times in life when our personal checks aren't what is needed, and a cashier's check or other types of checks are more appropriate or helpful. Most of the time, our personal checks are fine for most all of our transactions. Once in a while there is a situation that arises where our checks need a payment guarantee. Usually, this is involving larger sums of money. When we buy a new home for instance, that is one situation where it may be a better way to go. Another example may be if you are being shipped an expensive product, and the merchant is across the globe. Often, people in both parties are fine with a credit card transaction, but not everyone is set up with that capability either. When a merchant doesn't want to have to worry about cancelled or possible delayed payments, they may opt for a different type of check with a greater guarantee.
Luckily, many banks offer options that are agreeable to both parties to complete a larger transaction. Sometimes, banks even offer these check services to people that don't have accounts with them. Just ask around and you may find just what you need. Sometimes, travel companies, credit card companies and the US Postal Service can help with getting a check or a check substitute. By making a few quick phone calls, often a person can find what they need quickly.
Cashier's Checks or Bank Checks
Cashier's checks sometimes go by the name of Bank Checks. The reason they are called bank checks is that the money is "drawn" directly against the banks account, and the bank can vouch for that. It is not just drawn from a persons personal checking account which may have a lot of activity going on with it. For larger sums of money, a person or company can feel much more assured the money is 100% good, because the bank is saying so and drawn against its funds.
Basically, a cashier's or bank check is made out after a person has given the bank the amount of money (at least) for the amount they want the check for. The person's name that the the money is coming from, as well as going to, is also on the check of course. The bank employee does all of this with it being printed rather than handwritten which makes a mistake or alteration far less likely to impossible. They will often sign it, and then it is yours. You should have a copy of it, for your own records. Cashier's or bank checks are not returned to you. These kinds of checks cost less than a certified check. These checks can't have a stop payment once they reach their destination. The other types of checks to look into for your different banking needs will be Certified Checks, Money Orders, and Traveler's Checks.