What Is a Certified Check?

Long gone are the days of writing certified checks for everyday purchases or monthly obligations. Thanks to modern technology, you can conduct just about any transaction using your debit or credit card. And bills can be automated using your bank’s online bill pay feature. But what happens when you someone requests a check from you; certified that is. What does this mean? Where do you go to retrieve such a thing? Do you go online and order a batch or do you need to visit the bank? And how much do certified checks cost? 

Read on to learn the answers to these questions and more: 

How Certified Checks Work

When you write a personal check, the funds aren’t drawn from your account until the check is cashed by the recipient. But certified checks don’t work this way. Instead, funds equivalent to the amount of the check are allocated for this specific purpose, which makes it impossible for you to access them. And when the intended recipient gets around to depositing the check, the funds will be transferred from your account to theirs. 

In most instances, it takes one business day for the transaction to finalize and the funds to be available for use by the receiving party. But this policy varies by the financial institution, so it’s best to confirm your bank’s policies just in case there’s a longer window and you’re crunched for time. 

Certified Checks vs. Cashiers Checks 

When you request a cashiers check from your bank, the teller automatically withdraws the funds from your account and use them to cover the amount of the check. So when the recipient receives the check and deposits or cashes it, the funds won’t come from your bank account. Instead, they will come directly from the bank since you have already covered the cost. 

But unlike cashiers checks, certified checks don’t cause the money to be drawn from your bank account until the recipient does something with the actual check. This means they must deposit it into their bank account or cash it to obtain funds for the transfer from your account to occur. However, as mentioned earlier, the funds are unavailable for your use the moment the check is certified by the bank to guarantee that the check won’t bounce.

Who Uses Certified Checks 

Certified checks are used for several reasons, but there’s one common denominator: all intended recipients want to ensure that the payer is good for the money. In other words, they don’t want to have a worthless check on their hands after a transaction is complete. This is especially the case for large purchases when there’s a lot on the line. 

So by requiring a certified check, they are eliminating the possibility of a check bouncing and being out of money they are owed since they know that the certification means the funds have already been appropriated and are waiting to be transferred from the payer’s account to theirs. 

How Can You Get a Certified Check? 

Contrary to popular belief, the bank can’t issue a certified check to you. Why not? Well, a certified check is simply a personal check with a stamp on it that indicates it has been certified. 

Here’s how it works: 

  • Confirm you have an ample amount of funds in your checking account. 
  • Write a personal check to the intended recipient. Be sure to fill out key details, including the date, amount, and memo. 
  • Visit your bank or credit union with a valid form of identification and check in hand. 
  • Pay the fee to cover the cost of certifying a check.
  • Hand your check to the teller. They will imprint your check with a stamp to “certify” it. 

Quick Note: Not all financial institutions offer certified checks, so it’s a good idea to reach out in advance to confirm and ask about the fee. While on the phone, also ask the representative if there’s any other documentation you need before coming in. 

Other Options

Don’t have a checking account? Or maybe you want to give someone a certified check but don’t have any personal checks on hand. Some other options: 

  • Cashier’s check: available at your financial institution, and the fee ranges from $8 to $12. 
  • Money orders: limited to $1,000 by most issuers and available at the U.S. Post Office, Western Union, and most financial institutions for between $1.00 and $1.25. If you need a larger amount, you have the option to purchase multiple money orders. 

How Much Does a Certified Check Cost? 

The fee for a certified check varies by the financial institution but it usually ranges from $8 to $15. And if you have a high-end checking or money market account, the bank may certify checks at no cost to you. 

When Certified Checks Aren’t a Good Idea

Although certified checks are a source of guaranteed funds that pose less risk to both the buyer and seller, there are a few scenarios where they aren’t the most ideal option. 

There are cheaper options. 

If the recipient only wants guaranteed funds and certifying a check costs substantially more than a money order or cashier’s check, it may not be worthwhile. 

The transaction isn’t finalized.

Still working with the other party to sort out the details of the transaction? In this case, it’s best to hold off on getting a check certified. Otherwise, once the check is in the recipient’s hand, you can’t stop payment and they’ll be able to collect from you even if the amount of the check is higher than the final amount both parties agree on. 

How to Handle Issues With Certified Checks 

Fraudulent Checks 

Unfortunately, there’s a possibility you could end up with a counterfeit certified check if you’re on the receiving end of the transaction. And while there’s no way to guarantee this won’t happen, there are some steps you can take to protect yourself from being taken advantage of, including: 

  • Examining the entire check and searching for any elements that don’t look quite right, spelling errors, discoloration. Keep in mind that most certified checks include two signatures and a watermark. If these elements are missing, chances are you have a fraudulent check on your hand. 
  • Confirming the bank’s contact information (if it’s listed on the check) 
  • Calling the financial institution to confirm the validity of the check before handing over any assets
  • Visiting the bank with the party that issued the check if you have serious reservations 

If you don’t catch the fraud beforehand and deposit the check, you could be on the hook for the entire amount. 

Lost or Stolen Certified Checks 

Because a certified check is equivalent to cold cash, it’s in your best interest to not misplace it. And if all possible, keep it in a safe place so it won’t be stolen. But life happens, so if you do lose the check or it’s stolen, it’s not the end of the world. 

While you can’t walk into the bank and demand that they issue a new certified check for the same amount, you can purchase an indemnity bond. Usually, this is the only way that the bank will certify an identical check, and there’s usually a waiting period of up to 90 days before the bank will take action.  

There are no guarantees that the bank will accept an indemnity bond, but if they do, you will be protected if the lost or stolen check is cashed. You should also know that they are not always easy to find, so if possible, hold on tight to your certified check to prevent the headaches. 

The Bottom Line 

Certified checks help protect buyers and sellers when making large transactions but they are not without risk. So before you consider this option, do your homework to determine if it’s the best course of action or if there are cheaper alternatives that are just as effective.