Banking 101: What is a Certified Check?
Note: This article is part of our Basic Banking series, designed to provide new savers with the key skills to save smarter.
A certified check is guaranteed by the financial institution that issues it. The bank or credit union will verify your signature and ensure that you have enough funds to cover the check.
Someone selling a used car, for example, could ask to be paid by a check that is certified by your institution. By accepting a personal check instead, a seller could become a victim of check fraud, or the check could bounce.
We’ll break down where you can get a check that is certified, as well as detail the risks involved. We’ll also compare these types of checks to other forms of payment, such as cashier’s checks and money orders.
Where can I get a certified check?
The easiest way to get a check that is certified is to head to your local bank or credit union, though you should check first to see whether it will issue one. You can contact another local institution if yours doesn’t offer these types of checks.
You need to make sure you have correct information for the payee, whether that is a person or an organization. Also, be prepared with your license or another form of identification. You may have to pay a fee for these types of checks, but we’ll talk more about that later.
Once the check is certified, a hold is placed on those funds in your bank account, meaning that no one can access them except the check recipient.
Is there any risk of fraud with a certified check?
While checks that are certified ensure that funds are in place, they aren’t impossible to forge. Generally, banks must make funds available a business day after this type of check is deposited. Once you deposit it, you are responsible for the funds withdrawn.
So if you’ve received a check that is certified, it can be a good idea to call the bank to verify it is authentic. But don’t call the number on the check. Instead, call or visit the issuing bank to make sure the check is authentic. If you are scammed via fake certified check, it could be possible to put in a claim via your renters or homeowners insurance.
What if you lose a certified check?
If you lose a certified check — or it is destroyed or stolen — you’ll need to contact the financial institution immediately and file a declaration of loss. This declaration can be filed by the person who signed the check or the one receiving it. Ninety days after the check was certified, the bank or credit union is obligated to release the funds.
Certified check vs. other payment types
|Payment Type||What It Is||What It’s Generally Used For|
|Certified Check||Check drawn against your funds, guaranteed by bank||Large purchases, including home down payment/closing costs|
|Cashier’s Check||Check drawn against bank’s funds, also guaranteed by bank||Large purchases, including home down payment/closing costs|
|Personal Check||Check written against your funds in bank||Required transactions, such as paying rent; when check recipient knows, trusts writer|
|Money Order||Prepaid form of payment that guarantees funds||Usually used for smaller payments, such as sending money internationally|
Certified check vs. cashier’s check
Checks that are certified and cashier’s checks are similar, but the difference is in how the money is held. With a check that is certified, the money remains in your account until it is cashed or deposited (though it is still guaranteed by the bank). With a cashier’s check, the money is withdrawn by the bank and the money is then issued to the check recipient from the bank’s funds.
Both are often used when a transaction covers a larger amount of money. It’s important to know if a specific recipient requires one over the other, since the wrong form of payment may hold up a transaction. Many bank websites list costs for cashier’s checks but not checks that are certified, so check with the institution.
Here are some examples of offerings when looking at certified checks versus cashier’s checks:
- Ally: Cashier’s checks are free
- Bank of America: $15 per cashier’s check; waived with Preferred Rewards
- Chase: $8 per cashier’s check; waived with certain checking accounts
- Santander Bank: $15 per certified check
Certified check vs. money order
A money order, unlike checks that are certified or cashier’s checks, can be purchased at places in addition to financial institutions, including supermarkets, convenience stores and post offices.
Since you’re purchasing the money order with your own funds (typically with cash or a debit card), the money is guaranteed. Money orders generally have a limit of $1,000, and fees will depend on where you purchased the money order. They are typically good for midsize transactions where funds need to be guaranteed.
Certified check vs. personal check
A check vertified by your institution can provide peace of mind that funds are in place before a purchase. If a seller doesn’t specify, writing a personal check may be fine, but it’s essential to ensure the funds are in your account when the check is cashed. A bounced check or bad check can not only be expensive, but it may be illegal to write a check overdrawing funds, depending on the state in which you live.
But if you’re selling something valuable, it may be worth it to ask that the buyer present a check that is certified. As with any transaction, make sure that you wait until you’re given the check before you give the buyer the goods. If anything looks funny — misspellings (double-check that your name is accurate), typos or a missing signature — call the bank to ensure that the check is valid.
While getting a check that is certified may take an extra step or two, it is superior to personal checks in most situations.
If you regularly buy or sell valuable items — or are thinking of renting out property — you should consider asking for checks that are certified. Knowing that a check won’t bounce when you deposit it is priceless.