Personal check vs. certified check vs. cashier’s check

Who wants to use a check? Quite a few people, thank you very much.

Total check payments hit $27.23 trillion in 2021, according to the Federal Reserve, or about 21% of all non-cash payment values. That ain’t all grandma birthday presents. (That same report from the Fed showed that as the average check volume has increased, the number of checks used is dwindling.)

Checks, then, are an important, albeit dwindling, form of payment that you’ll probably end up using from time-to-time. The key is to know the different types of checks at your disposal, when to deploy which one and what costs are involved. 

Roughly one thousand years ago, an Iranian traveler named Nasir-i Khosrau made use of a sakk – written instructions from a merchant telling his bank to make a payment from his account. 

Checks look much different today, but the basic concept has held constant.

At its core, a personal check is a declaration of payment from the issuer to the payee that orders a financial institution to pay the amount of money noted on the check to the person who’s named as the recipient of the check.

The party writing the check only has a few clear obligations to get the payment process rolling, including:  

You can also add any clarifying note to the payee on the “Memo” line in the lower left, such as “for services rendered.”

The check can be cashed at the bank that issues the check (where the bank may charge a small fee if the payee doesn’t have an account at the bank) or be deposited at the recipient’s bank, where typically the payee typically must wait one to two business days for the check to clear for domestic  banks. If the check is international it may take up to six weeks to be available, sometimes longer. 

Some retailers, especially big box stores and major grocery store chains, will also allow you to either cash a personal check (again, with a modest service fee attached) or pay for goods with a personal check.

While historically bank customers had to pay for their checks, and many still do, many banks, such as Ally and Chase, issue checks gratis.

Banks and credit unions also offer cashier’s checks where the funds needed are backed by the issuing bank and not the customer’s bank account. These checks often used for big-ticket purchases, like a new home or a new vehicle.

To get a cashier’s check you’ll need to go to the bank with your government-issued ID, the name of the person you are paying, the exact amount you wish to pay and any memo note you want to include.

Once at the bank, you’ll speak to a teller who will create the check and the funds will be withdrawn from your account, or you can pay cash. The bank will hold these funds until the check is cashed. 

You’ll receive the check and a receipt. For security’s sake, hang on to the receipt until the check clears.  

Expect to pay a service fee of around $10 to $15, although fee figures may waver from bank to bank, and some financial institutions do offer free cashier’s checks to regular customers.

Payment recipients who want to be sure an incoming check is legitimate can request a certified check. Like a cashier’s check, a certified check is usually used for a large purchase. 

With a cashier’s check, the funds are drawn from the bank’s account. A certified check, on the other hand, is drawn on from a personal account. Still, a certified check shows that the bank Verified the funds were in the account at the time of issue. The funds are ‘earmarked’ for payment of the check. 

By having the paying bank certify the check is coming from a bank account with enough money to cover the purchase, that payee has less risk of experiencing a bounced check. 

To get a certified check, the payer must have an account at the bank that issues the certified check. Most banks require you to go to the branch in person to get a certified check. This is because it physically stamps your paper check, so it will need you to provide a check from your checkbook. If you are unable to visit your bank in person, call and see it is able to do it over the phone.  

When you go to your bank to get a certified check, you’ll need a government-issued ID and your checkbook. You will fill out the check at the bank in front of the teller and he or she will stamp the check to certify that you have the funds in your account to cover the check.  

Also, be prepared to pay the issuing bank or credit union a service fee of between $10 and $20, depending on the financial institution. 

A personal check is a form of payment where the payer issues a paper statement with a specific payment amount, a specific date and the names of the payee and payer included on that statement. 

Unlike cashier’s checks or certified checks, there is no certain the check won’t bounce due to insufficient funds which represents a risk to the payee. This is why so many personal checks are used for more modest financial amounts.

A cashier’s check guarantees there are sufficient funds in the account to cover a payment. It does so by immediately withdrawing the funds from the customer’s account and using funds from the financial institution’s own account.

A certified check also guarantees there’s enough funds in an account to cover a check payment, but it is restricted to using funds only from the paying customer’s account. The money is not withdrawn from the customer’s account until the certified check is cashed. 

In 2022, U.S. banks and credit unions filed 459,851 “suspicious activity reports” for check fraud, according to the Richmond Federal Reserve. That’s significantly up from 249,812 SARs filed in 2021.

Identity thieves can easily access the information that shows up on a personal check, such as name, address and a financial institution’s routing number. Stolen checks often come right out of USPS mailboxes.

Once that data winds up in a fraudster’s hands, it’s relatively easy for criminals to misrepresent themselves to financial institutions and write fraudulent checks or forge checks in another person’s name. The way banks and credit unions operate, it may take weeks for financial institutions to flag a check fraud case, and by that time, the perpetrators are long gone.

Another common check fraud scheme is to approach victims online and ask the victim to deposit a check and return some of the funds back to the fraudster. The victim sends the fraudster money and then the check bounces. Leaving the victim out whatever funds they had sent. This scam resulted in $770 million in losses in 2021.

To prevent check fraud, consumers should never share personal data with anyone they don’t know and never respond to email or texts asking for personal data.

If you do accept a check from a stranger, do not agree to return funds to them. You can also call the issuing bank and verify that the funds are available before depositing a check. 

If the bank cannot verify the certified or cashier’s check there’s a good chance fraud is involved. In that scenario, don’t accept the check and report the incident to the bank that issued the check and report it to your own bank, as well.

Frequently Asked Questions (FAQs)

Personal, business and payroll checks are typically valid for 180 days. Some checks will state on the check that it is good for 90 days.

Take a check in your name from your bank and write the date, the name of the payee, the amount (both numerically and alphabetically), your signature and, on the lower left side of the check, write a note on why the check was written. Keep records of all checks in case you need clarification later on.

Cashier’s checks always clear in one business day. Some personal checks do clear in a day, but many personal checks take several days to clear. International checks may take weeks to clear.

Both certified checks and cashier’s checks are guaranteed by banks and thus are safer and more reliable than personal checks.

A former Wall Street bond trader, Brian O’Connell is the author of two best-selling books; “The 401k Millionaire” and “CNBC’s Creating Wealth.” His bylines include TheStreet.com, Forbes, The Wall Street Journal, U.S. News & World Report, Fox Business, and The Motley Fool, among others. With 20 years of experience covering business news and trends, particularly in the business and financial sectors, he believes education is the best gift a financial consumer can receive–and brings that philosophy to every story he writes.

Taylor Tepper is lead editor for banking at USA Today Blueprint and is an award-winning journalist and former senior staff writer at Forbes Advisor, Wirecutter/New York Times and Money magazine. His work has also appeared in Fortune, Time, Bloomberg, Newsweek and NPR. He lives in Dripping Springs, TX with his wife and 3 kids and welcomes bbq tips.

How to Trace a Certified Bank Check

Shanan Miller covers automotive and insurance subjects for various websites, blogs and dealerships. She has extensive automotive experience, including auction, insurance, finance, service and management positions. Miller has worked for dealer sales events around the United States and now stays local as a sales and leasing consultant for a dealership.