247:, bank drafts carry the same legal weight as standard checks but are provided as a service to clients as a payment instrument with guaranteed funds. Drafts (or money orders depending on the issuing institution) usually have better security features than standard checks, and as such are often preferred when the receiver is concerned about receiving fraudulent payment instruments. However, bank drafts can also be subject to counterfeiting, and as such can be held or verified by depositing institutions in accordance with their hold funds policy, prior to providing access to the funds.
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has been "verified" or is "clear" in about 24 hours. This gives the victim a false feeling of security that the money order was real, so they proceed with the transaction. When the bank eventually discovers that the money order is counterfeit and reverses the account credit many days later, the customer will usually have already mailed the item. In many cases the "check" or "money order" is for more than the amount owed, and the victim is asked to refund the difference in cash.
22:
240:, cashier's checks are recognized as "guaranteed funds", and amounts under $ 5,000 are not subject to deposit hold (except in the case of new accounts). The length of a hold varies (2 days to 2 weeks) depending on the bank. It is not clear what length of time may pass before a bank can be held responsible for accepting a bad cashier's check.
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is a scheme wherein the victim is sent a cashier's check or money order for payment on an item for sale on the
Internet. When the money order is taken to the bank it may not be detected as counterfeit for 10 business days or more, but the bank will deposit the money into the account and state that it
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guaranteed by a bank, drawn on the bank's own funds and signed by a bank employee. Cashier's checks are treated as guaranteed funds because the bank, rather than the purchaser, is both the drawee and drawer and is responsible for paying the amount. They are commonly required for real estate and
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When cashier's checks took weeks to clear the banks, they were often forged in fraud schemes. The recipient of the check would deposit it in their account and withdraw funds under next-day availability, assuming it was legitimate. The bank might not be informed the check was fraudulent until,
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is used non-uniformly: some institutions offer both money orders and bank drafts depending on the amount, while others only offer one or the other for any amount. Generally, bank drafts and money orders are treated the same way with respect to guaranteed funds and hold policies.
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Due to an increase in fraudulent activities, starting in 2006 many banks have insisted upon waiting for a cashier's check to clear the originating institution before making funds available for withdrawal. Personal checks thus have the same utility in such transactions.
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When customer asks a bank for a cashier's check, the bank debits the amount from the customer's account immediately, or receives the amount of the check in cash, and assumes the responsibility for covering the cashier's check. That is in contrast with a
183:'s name, the written and numeric amount to be tendered, the remitter's information, and other tracking information (such as the branch of issue), are printed on the front of the check. The check is generally signed by one or two bank employees or
145:, which is a personal check written by the customer and drawn on the customer's account, on which the bank certifies that the signature is genuine and that the customer has sufficient funds in the account to cover the check.
176:, and special bond paper. These are designed to decrease the vulnerability to counterfeit items. To be recognized as a cashier's check, words to that effect must be included in a prominent place on the front of the item.
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perhaps, weeks after the customer had withdrawn funds made available by the fraudulent deposit, by which time the customer would be legally liable for the cash already withdrawn. However, with the introduction of
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Genuine cashier's checks deposited into a bank account are usually cleared the next day. The customer can request "next-day availability" when depositing a cashier's check in person, with a special deposit slip.
152:, which is a non-personalized check provided by the bank for the convenience of a customer making withdrawals or payments, but it is not guaranteed and is functionally equivalent to a personal check.
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are a popular alternative to cashier's checks and are considered safer than personal bank checks. However, in the United States, they are generally not recognized as "guaranteed funds" under Reg CC
138:, also known as a banker's draft, which is a check provided to a customer, drawn by the bank (the drawer), and drawn through another bank or payable through or at a bank (the drawee).
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and check issuing. One leading contractor is
Integrated Payment Systems, which issues cashier's checks and coordinates redemption of the items for many banks, in addition to issuing
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in a prominent location, usually the upper left-hand corner or upper center of the check. In addition, they are generally produced with enhanced security features, including
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282:, most insurance and brokerage firms will no longer accept money orders as payment for insurance premiums or as deposits into brokerage accounts.
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and other payment instruments. In theory, checks issued by a financial institution but drawn on another institution, as is often the case with
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Counterfeit money orders and cashier's checks have been used in certain scams to steal from those who sell their goods online on sites such as
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131:, for which the bank does not debit the amount from the customer's account until the check is deposited or cashed by the recipient.
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352:"Irrevocability of Bank Drafts, Certified Cheques and Money Orders, 1986 65-1 Canadian Bar Review 107, 1986"
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516:"What Is A Cashier's Check? Definitions, Uses, How To Buy One, Cost And Alternatives"
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Some banks contract out the maintenance of their cashier's check
411:. Washington, DC: Comptroller of the Currency. January 16, 2007.
465:"Certified Check or Cashier's Check – Which Is Better for You?"
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405:"Avoiding Cashier's Check Fraud: Consumer Advisory CA 2007-1"
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deal primarily with the United States and do not represent a
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Because of US regulatory requirements associated with the
187:; however, some banks issue cashier's checks featuring a
571:"12 U.S. Code Chapter 41 - EXPEDITED FUNDS AVAILABILITY"
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Also, a cashier's check should not be confused with a
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Check from the direct funds of a financial institution
160:Cashier's checks feature the name of the issuing
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595:"Bank Drafts in Canada – What You Need to Know"
228:In the United States, under Article 3 of the
29:The examples and perspective in this article
649:. National Consumers League. Archived from
423:"Frequently Asked Questions about Check 21"
141:A cashier's check is also different from a
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67:Learn how and when to remove this message
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134:A cashier's check is not the same as a
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106:as used in the United States) is a
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619:"Money Orders and Bank Drafts"
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191:signature of the bank's
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447:"12 C.F.R. § 229.2(gg)"
230:Uniform Commercial Code
193:chief executive officer
599:www.springfinancial.ca
427:www.federalreserve.gov
381:Merriam-Webster Online
259:Alternatives and risks
98:; in Canada, the term
326:Paymaster Corporation
647:Internet Fraud Watch
250:In Canada, the term
49:create a new article
41:improve this article
623:www.canadabanks.net
548:Scam Victims United
494:The Free Dictionary
643:"Fake check scams"
174:color-shifting ink
377:"Cashier's check"
331:Traveler's cheque
263:In many nations,
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544:"Our story"
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386:22 November
321:Money order
272:Patriot Act
252:money order
628:2020-04-20
604:2023-11-08
580:2023-11-08
553:2010-06-16
525:2023-11-08
432:2023-11-08
362:2024-08-09
337:References
291:Craigslist
166:watermarks
100:bank draft
189:facsimile
45:talk page
673:Category
520:Bankrate
451:ecfr.gov
305:See also
274:and the
201:accounts
185:officers
121:Check 21
39:You may
679:Cheques
409:occ.gov
245:Canada
211:, are
181:payee
108:check
47:, or
659:2015
501:2012
476:2012
388:2012
296:The
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