Cashier's check

What It Means

A cashier's check is a check a bank issues and sells, drawn on the bank's own funds, so the bank itself is responsible for paying it. You pay the bank the amount up front, and it makes the check out to the person or business you name. The OCC notes that cashier's checks have long been a trusted way to pay for goods and services, which is also why scammers copy them.

How It Sounds at Home

• "The dealer wants a cashier's check for the down payment."
• "I'll stop by the bank and get a cashier's check made out to you."
• "A buyer I've never met sent a cashier's check for way more than I asked."

The Breakdown

An example. Grace is selling her car for $6,000. A buyer who says he can't come in person mails a cashier's check for $8,500 and asks her to wire $2,500 to his "shipping agent". Her bank shows the full $8,500 as available the next day, so she wires the money. Three weeks later the bank tells her the check was fake. Her bank takes the deposit back, and the $2,500 she wired came out of her own money.

Where it goes wrong. Money showing as available doesn't mean the check has proved good. The FTC explains that banks must by law make deposited money available quickly, usually within a day or two, while learning that a check was bad can take weeks. According to the OCC, when a cashier's check turns out to be fraudulent, the person who deposited it owes the bank the full amount.

What to watch for

• A check for more than the price, with a request to send back the difference.
• A request to pass the money on by wire, gift cards, money ordersMoney orderA prepaid paper payment for a set amount, bought up front and made out to a named payee; the U.S. Postal Service sells domestic ones up to $1,000. See more or cryptocurrency, which the FTC warns against.
• A buyer you don't know and can't meet. The FTC's advice is to count on money from a check only when it comes from someone you know and trust.
• A check you haven't confirmed with the bank that issued it, using a phone number you found yourself.

Good to Know

The FTC explains that banks must make deposited money available quickly, often within a day or two, while it can take weeks to find out a check was fake, and the OCC notes you then owe the bank the full amount of the check. HelpWithMyBank.gov, run by the OCC, and the FTC both point you to the issuing bank: get its phone number on your own, from its website or another independent source, rather than using one the sender gives you. The Consumer Financial Protection Bureau warns sellers about buyers who overpay with a check or money order and ask for the difference back.

Related Terms and Categories

• Money order

  A prepaid paper payment for a set amount, bought up front and made out to a named payee; the U.S. Postal Service sells domestic ones up to $1,000.

• Checking account

  A bank or credit union account for everyday money going in and out, used by debit card, checks, transfers and direct deposit.

• Available balance

  The money in a bank account you can use right now: the posted balance minus pending card purchases and any deposit the bank is still holding.

• Phishing

  A scam where someone sends an email or text that looks like it's from a company you trust, to trick you into giving up passwords, account numbers or other details.

• Peer-to-peer payment

  Money sent directly from one person to another through a payment app or a bank's app, such as Zelle, Venmo or Cash App.

Household money and budgeting