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What Is A Certified Check?

What Is A Certified Check?

What Is A Certified Check? A legitimate certified check is as good as cash. It is as good as handing over cash if you have a non-fraudulent certified check in your hands. When a certified check is created, the issuing bank verifies that the account holder has enough money in his or her account to cover the check.

The bank will set the funds required to pay the check aside. They put the money aside so that the account holder cannot use or spend the money, so that there is definitely money in the account to cover the certified check. In some countries, a certified check is used as legal tender when making a purchase or transferring money from one person to another.

Money is set aside in the account holder’s bank until the certified check is returned or it is cashed by the recipient. The check itself cannot bounce unless an illegal act has taken place. For example, if the check is based on a fraudulent loan, then the issuing bank may disavow the check, which leaves the recipient with the job of suing the sender/buyer for any money that is owed. Another possibility is that the bank fails prior to the recipient cashing the check, but that is not likely to happen because the US government will always be soft enough to bail out bankers whenever their gravy train gets a little thin.

Das ist Gut

Germany is the only developed country that doesn’t allow its regular banks to issue certified checks. However, this is Germany after all, which is the same country ultra-socialist country that has introduced over 50 million Euro’s worth of fines to punish people who dare to speak their mind on social media. Maybe they were tired of all the Hitler references that people make. How odd that the Germans want to restrict the free flow of information, a bit like Hit…erm…oh…never mind.

How Common Is Fraud?

Certified check fraud is not that common with regards to bank-issued certified checks, but fraud does happen. For example, in Macau, you cannot pay for chips with a certified check because it is not considered credit for gaming. They installed the law after forgers kept robbing casinos with fake cashier’s checks.

You also have to remember that checks are forged too, and so are cashier’s checks and money orders. A certified check is no more safe from fraud than cashier’s checks, regular checks and money orders. The only reason that certified check fraud is not as common these days is because certified checks are not as common these days and it takes a lot of effort to create forgeries when so few people use them and so few banks will issue them.

A Certified Check And A Cashier’s Check Guarantees Payment

handing over moneyIn most cases, a cashier’s check and a certified check will guarantee payment to whoever cashes it. Stopping a cashier’s check or a certified check is very difficult if you are the sending party.

The difference between a cashier’s check and a certified check is that the certified check draws its funds from your account. When you have a certified check issued, the money needed for the check is put on hold in your bank account. As and when the certified check is cashed, it is then that the money in your account is taken off hold and is used to pay the check.

When you pay for a cashier’s check, you hand over your money to the bank and it becomes the bank’s money. When the cashier’s check is cashed, the money that funds the check is actually the banks and not yours.

Where Do You Get A Certified Check From?

You have to get a certified check from your account provider. Your account provider may be your bank, your online-only bank, your credit union, or a money company. You have to go to them and request a certified check.

Before the check is given to you, the money will be put on hold in your account. If you do not have enough money in your account to cover the certified check, then the account provider will refuse to issue you with a certified check, but you may still have to pay the fee for it.

Different account providers will charge you different amounts for your certified checks. For example, the Ally Bank will not issue a certified check, but you can use your money in your account to buy a cashier’s check from them, and they do not charge extra fees for cashier’s checks.

For example, the Bank Of America offers cashier’s checks, but will not offer certified checks, yet Wells Fargo offer cashier’s checks and certified checks with a flat fee of $10 each.

The Downsides To Certified Checks

Certified checks can be forged, when means some recipients and some sellers are still being screwed. A certified check almost always costs a fee, but you may be able to get around it depending upon which bank you bank with because some will offer you a cashier’s check that is fee free.

You may put a stop payment on a regular check if things go bad, but you cannot put a stop check order on a certified check. On the other hand, it is good to know that the certified check you are sending has already been paid for, so it doesn’t matter when it is cashed. It is a little annoying when the recipient doesn’t cash your paper check right away, so you have to keep a certain amount of money in your account for an overly long time until the check is cashed.

Conclusion – Should You Use Certified Checks?

The fact that fewer and fewer banks are offering certified checks suggest that they do not like them. Most will tell you that they do not offer certified checks, but that their cashier’s checks are certified. You probably shouldn’t use certified checks these days because there are so many online options that there shouldn’t be a direct need for cashier’s checks, money orders, banker’s drafts or certified checks. There is an online or digital option for almost every circumstance with the exception of sending somebody money in their card, in which case it is probably better to use a check, money order, bank draft, cashier’s check or certified check. By all means, you should consider a certified check as an option if you are looking to buy something, but consider an option that offers you more protection as a buyer. Even something such as PayPal will offer you more protection than a certified check.

Be wary if the seller is pressuring you for something such as a cashier’s check or a certified check, or a wire transfer, because these payment methods are typically difficult to stop and difficult to reverse, which makes them ideal payment methods for scammers.

About The Author

Ash The Great

After a varied career in different industries from the hospitality industry to the financial consultancy industry, Ash now spends his days working as a professional writer.

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