Certified and Cashier’s Cheques represent two forms of assured payment. So you will need them in several situations such as online business transaction, down payment, legal settlement, etc. to ensure that payment is complete. It depends on a payee, but there are some of vital points that must be considered.
What Is A Certified Cheque?
It is one type of personal Cheque that is drawn on a customer’s bank account. But it is different from a regular personal Cheque and is verified as a good Cheque by a bank or financial institutions.
The bank actually confirms that the customer is having sufficient funds in his account for covering the Cheque amount.
Most of the banks as well as credit union are seen to issue certified Cheque. It is a safe way of payment if you do not wish to write or may be accept any ordinary personal Cheque.
A bank officer certifies on a Cheque that good fund was available in the fund of the Cheque at the time when the Cheque originated and that the signature present on it is authentic.
The bank will set aside all funds and will only be using them for paying certified Cheque. If the Cheque is genuine, then you will not face any issue to deposit funds in your account.
As certified funds have been verified by a bank or a credit union that have issued the Cheque, recipients must be confident that there is fund for backing up that Cheque. If you providing anyone with a certified Cheque, you need to fill it out in the same way as you would have filled another Cheque. Write the name of the recipient on the Cheque, put an amount as well as sign it.
A personal banker will verify the money in the account, put a stamp on the Cheque as certified and place hold on that amount of money. After the bank puts aside the money, you will not be able to write any Cheque or withdraw it against that amount. Banks are seen to maintain a hold on the amount until the recipient is seen to deposit or cash any certified Cheque.
So a certified Cheque will unlikely bounce and thus is a trustworthy way of paying for any item by a Cheque.
These Cheques are great selection if you are going to make a purchase or require any paper trail as a purchase proof. Remember that obtaining any certified Cheque will need you to have one account at a bank that will issue you the Cheque.
What Is A Cashier’s Cheque?
It is issued by banks as well as credit unions like a certified Cheque and the procedure of getting it is also similar. But it is never drawn on an account of a customer.
The amount of money is drawn from the own funds’ of a bank.
There is also another way of payment if you do not wish to make use of any cash, credit card or even write any personal Cheque. It is a safe method. Similar to a certified Cheque, a cashier’s Cheque can be used for several huge purchases. It includes down payment for a house, car as well as other transactions.
In order to request for a cashier’s Cheque, you need to provide the bank the recipient’s name and Cheque amount.
The bank will print the Cheque as well as remove fund from the account immediately. Some financial institutions or banks are seen to issue a Cheque if you do not have any account with them. But you have to bring cash when you will request for the Cheque.
Funds will be kept aside for the recipient and is there in the account of the bank till the recipient cashes it ore makes a deposit of the Cheque. This procedure will guarantee fund availability and make sure that any Cheque gets cleared.
What Are The Main Differences?
Both the Cheques come with relatively less risk if the Cheque in consideration is authentic. However, cashier’s Cheque is considered to be safer as the money is drawn against the account of the bank and never an account of any individual’s or business.
Fraud Cheque scams are seen in various forms. The very common one involves passing off one fake certified or cashier’s Cheque by a scammer as a purchase payment.
For instance a car is listed for sale via an online store. The scammer will contact you to inform that they are interested and provides you with a Cheque that looks official. It is provided for the car’s payment.
After depositing the Cheque the bank will tell you that the Cheque is fake. You will not only be running short of money but you will also lose the car in the entire process.
By law, banks have to make money from the official bank Cheques such as certified Cheque and cashier’s Cheque that are available within a working day after depositing it to the account. Despite of having money in the account will not guarantee that it is a good Cheque. It can take up to few weeks by any bank for discovering that the Cheque fraud.
By that time you will have either written Cheques or purchased things with the debit card against the amount. If such debit payments have been returned or if the Cheque bounces, it means overdraft or payment of non-sufficient fund fee for an individual.
There are several circumstances that make certified and cashier’s Cheque necessary. Purchasing any automobile, making payment for court fines, security deposit of rental housing or managing purchase transactions of real estate are some examples where these Cheques are of good use.