What Is a Certified Check?

Certified checks are a popular method of payment for big transactions. That’s because, unless the person is particularly adept at forging checks (a felony), you’re definitely going to get paid — a certified check isn’t going to bounce for lack of funds. It’s basically the bank’s promise to deposit a giant pile of cash into the account of the person cashing it.

What Makes the Check Certified?

A certified check is sort of like a cashier’s check, but slightly different. It’s not paid for in cash like a cashier’s check. It’s written out like a regular check. The bank then sets aside funds from the check writer’s account to ensure that it will be there when you deposit the certified check.

If for whatever reason the money’s not there (it will be), the bank promises they’re going to honor it and pay anyway. It’s virtually impossible to bounce a certified check, which makes them particularly attractive for big transactions — like the down payment on a house.

Fees are generally under $10, but if the check isn’t for that much, the fee will be much lower. Not all banks offer certified checks, so if they don’t, you’re going to have to go with a cashier’s check.

Why Do People Use Certified Checks?

When a transaction is large — in the thousands of dollars — you’ll be pretty unsurprised to learn that the person getting paid isn’t likely to trust a personal check. At the same time, the person paying out the money isn’t going to want to walk around with several thousand dollars in cash in their pocket. Enter the certified check, which offers the buyer the safety of a check while providing the seller the peace of mind that comes with getting paid in cold, hard cash.

How Is a Certified Check Different From a Cashier’s Check?

For all intents and purposes, it’s not. The only difference is how the check is funded. Is the money coming out of a bank account (certified check), or was the check paid for in cash (cashier’s check)? From the perspective of the person receiving the check, the difference doesn’t really matter.

Both are two different forms of one thing: the “official check.” This is basically any kind of check for which the bank guarantees payment. However, as stated above, the way the check is initially funded is different. With a cashier’s check, the money is given to the bank up front in cash. With a certified check, the money is simply taken out of the customer’s account and held as if it were already spent until the payee deposits the check.

In the case of a certified check, the money will generally “clear” your account the next business day.

What About Fraud?

So how do you prevent yourself from being defrauded with a certified check? Here’s a few simple safety tips.

  • Give the check a once over. If it looks “off,” it probably is.
  • Check for typos by reading the check aloud.
  • See if the address of the bank on the check matches the address online.
  • Ditto with the phone number.
  • When in doubt, call the phone number for the bank online and make sure that the check works.
  • The bank can verify the check with the name of the person using it as well as the check number.

When it comes to getting paid, you can do a lot worse than a certified check in terms of security. But beware: If you have been a victim of fraud with a certified check, you’re going to be on the hook for the whole cost of the check. That’s the law. So be comfortable taking them, but when in doubt, verify. It only takes a few minutes to call the bank, but it can save you thousands of dollars, not to mention all the aggravation and headaches.

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