There are many terms in the world of finance, some of which you may never have even heard of. One that you definitely need to know about those is certified checks. These will come in handy if you need to make some big payments!
You can learn more about certified checks with CreditNinja’s Certified Check Guide, but in the meantime here are some of the basics that you need to know about certified checks and if they are right for you.
What Certified Checks Are
So what exactly is a certified check? Since you’re here there’s a good chance that you already have some idea what a certified check is, but if you don’t then allow us to enlighten you.
In many respects a certified check is a lot like your regular run of the mill check. It’s a check that you can use to pay for things. The big difference is in the word ‘certified.’ If you have a certified check, then it means that the check in question has been looked at and validated by a bank. With this, your banking provider has confirmed that you have enough money in the bank to cover the balance being written on the check.
As you can imagine, a certified check can provide a lot of reassurance to the person on the receiving end of the check. Think about it – if someone gives you a check, wouldn’t you rather know that they absolutely do have the funds to pay you the money? The check is far less likely to bounce if it’s a certified check, since you know that the person who has written the check has the money.
Now you don’t technically have to use a certified check any time that you use a check to pay for something. In most cases it simply isn’t necessary. With that being said, if you are paying for something bigger then there’s a good chance that you are going to need a certified check for it. You don’t need a certified check for your weekly grocery shopping trip, but it’s another story entirely if you’re buying a brand new car.
Some other situations in which you may need a certified check include when you are buying land, boats, or used merchandise online. You may also need one if you are putting a down payment on a house.
Ultimately, if you’re selling something then you’ll want assurance that you will certainly get the money in exchange for the object in question. You may ask for a certified check from the buyer if you don’t know them very well just to make you feel more secure in selling to the person in question.
When Certified Checks Are Used
As we’ve already mentioned, certified checks are usually used when you’re making a big purchase with someone that you don’t know very well. Personal checks are much more risky for sellers, so certified checks will provide a little extra reassurance that is certainly much needed in these situations. It’s also much less risky for the buyer too, since they won’t have to hand over mountains of cash for big purchases.
Pros and Cons of Certified Checks
As with anything in the world of cash and finance, it’s always a good idea to consider the pros and cons of any decision. So what are the pros and cons of certified checks?
Let’s start with the positives. By and large the biggest advantage of a personal check is that they are a much safer way to carry your cash. They’re ideal if you’re going to make a large purchase, and they are less risky than carrying around large amounts of cash.
They’re a good choice if you want to give a seller some extra security too, since the funds are already there if there happen to be any issues with the credit score.
On the flip side there are also issues with this form of payment too. It’s still possible to be scammed when you’re given a certified check. You may not realize that the whole thing was a scam until after the payment has already been processed with the certified check, which is a major problem. You may also have to pay a service fee, which is never ideal.
Getting a Certified Check
The very first thing that you need to do in order to get a certified check is to get in touch with your banking provider. You need to ask them if they will actually allow you to get a certified check, since not all banks will offer this service. If they don’t offer the service then you will need to visit another banking provider for the job.
If your bank does offer the service, then it’s important that you head to your local bank. Don’t try doing this online because the chances are that it won’t work. You’re going to have to visit them in person in order to get the bank to mark it as certified. You should also ensure that you bring some form of identification with you.
Make sure that you also ask about the fee. There’s a strong chance that you will incur a fee for the services offered by your bank when you get a certified check, so it’s best to be prepared for that. Different banks have different fees, so check what your bank’s fees are first. There will also be some banks that only offer cashier’s checks, so it’s important to keep that in mind. It’s not likely that you will find a bank that offers both certified and cashiers checks.
When you get to your bank, you will likely be asked to sit down with a member of staff. You will have to ask them for any further instructions that you need to follow. From there, you can then write the check as the teller witnesses. When you have done this, you will then be asked to present your ID so that they can assess that you are who you say you are.
At this point, you may need to wait a little while. The teller is going to have to confirm that the funds are actually there. When they have done this, the check will be stamped and marked to confirm that it’s certified.
Finally, pay your fee for the bank and keep the receipt on hand just in case you need it. At the very least you should be keeping the receipt nearby until the check has cleared in your banking account.
Protecting Yourself From Fraud
It is true that certified checks are much safer than your average run of the mill check. That does not, however, mean that they are exempt to fraud. All forms of payment are susceptible to fraud, and it’s best to be vigilant and remember that. It’s important that you confirm you are getting a legitimate check rather than one that has been fraudulently made. You will see that it’s fairly simple to work out if a check is illegitimate.
If you get a certified check from someone, always take a look at it first. It’s possible that the person who gave it to you could have made it themselves using technology, copying logos from the bank and other information to make it look like the real deal. If you have any doubt about the legitimacy of the check, call the bank provider straight away to confirm it’s real. Don’t call any numbers that may be listed on the check itself, since these could also be fraudulent. Instead, look online and find the banking provider’s actual phone number.
There are also a few key features that you may be more likely to notice on a fraudulent check. First of all, the check may not have any watermarks, color changing ink or security threads. These are things that you would typically find on the real deal since they are vital security features.
Likewise, you may also find that the address of the bank or the payer is missing on the check, or could be spelled incorrectly. The amount of money written down may be higher than required, and the routing number may be wrong.
In the event that the check does appear to be fraudulent, do not put it into your bank account. Instead, speak to your banking provider and the one that’s allegedly associated with the check, and report what has happened to the Federal Trade Commission. You may also need to report it to the U.S. Postal Inspection Service and the state attorney general too.
What Can I Use Instead of a Certified Check?
Certified checks can be an attractive option for some situations and for some people. They are not for everyone, however. In this case, you may want to look for an alternative. Thankfully, there are a number of things that you can try.
The most obvious option is a bank transfer. With this, you can transfer the money from one count right to another one. You just need to use the automated clearing house network to make a transfer electronically. Such transfers do take a few days to go through in some cases. They can also sometimes cost you money, but this is not always the case.
You could also try money orders. These are very similar in nature to official checks but you can’t have more than a certain amount of money on them. Money orders are often bought from your local post office or store, as well as from your bank which can make them a very convenient option. In order to get a money order you are going to have to say who the recipient is and you are also going to incur a fee for the money order. It’s ideal if you don’t have an official check though or you don’t want to pay the higher fees required with a certified check.
It’s worth considering wire transfers too. These are much faster, though the feed can be incredibly high so it’s important to be mindful of that. There are even some banks that are going to charge for the receipt of the money too.
Finally you can try money transfer apps, like Venmo or Paypal. With these you can make payments fast and easy, and they’re ideal for a whole bunch of other situations too.
How Long Will It Take For My Certified Check To Clear?
In most cases, the money for the check is going to need to be available one business day after you have made the deposit. The exception to this is if it is a federal holiday.
In the case that you have made the deposit using a bank owned ATM, you will instead have the funds available two business days after the initial deposit is made. If you have made the payment using a nonproprietary ATM then you are likely going to need to wait five business days to receive the money if you are the recipient of the money.
The Difference Between Cashier’s Checks and Certified Checks
As we mentioned earlier, most banks will only offer either a cashier’s check or a certified check. It’s rare that you will find a bank that will offer both. But what is the difference between the two?
There’s one key difference between these two kinds of checks – one of them is written by an individual person, whereas another is instead written by the bank. In this case, the certified check is written by the person, while you will need the bank to write a cashier’s check. This also influences how the checks can be used. A cashier’s check is not suitable for online payments, whereas certified checks are suitable for online payments.
If you choose to use a cashier’s check then the bank will clarify that your account has the money to cover the payments and confirm that it is suitable for use. In the event that the check is stolen or lost, the bank has already guaranteed the payment so the losses are covered by the bank.
If you need a form of secure payment, a certified check is a great choice in many circumstances. There are of course pros and cons, but they are handy for lots of situations so it’s a good idea to familiarize yourself with them.
Likewise, it’s always important that you ensure that if you are on the receiving end of a certified check, it is not a fraudulent one. Always stay vigilant in order to protect yourself and your money, and seek help if you are ever in doubt.