What Is a Certified Check?

A check is considered to be certified when a financial institution verifies that there are sufficient funds in an account to pay the amount of the check.

The Meaning of a Certified Check Along with Some Examples

A check that has been validated by a financial institution is known as a certified check. An officer of the bank where the account is held attests that there were adequate funds in the account to cover the value of the check. They also verify the authenticity of the signature, which reassures the person who is accepting the check that it will not bounce or be returned as long as the money is deposited or cashed within the allotted time frame. When making a significant purchase, such as a down payment on a house or a security deposit for a residence you rent, many people choose to use certified checks as their payment method of choice. A certified check could be necessary for some private or less significant transactions as well. If you were to buy a car from a private owner, for instance, they would need a certified check rather than a personal check from you as a means of ensuring that they will be paid.

The Process Behind Certified Checks

If you are paid with a certified check, it indicates that the individual who wrote the check went to the bank branch personally. There, a bank employee confirmed that the individual in question was the account owner and that they had sufficient funds to cover the cheque. Banks will normally stamp and sign a check after determining that it is legitimate and after the check has been signed off on. They might also make a note of any conditions that are attached to the certification, such as the period of time during which it is valid (often 60 or 90 days). During that time period, the bank needed to stop the person who wrote the check from using the money that was used to fund the check. If you make a deposit using a certified check, you will typically have access to the first $5,000 of your deposit the following business day. If the payment is being made using a personal check, there is no way for you to verify that the individual who wrote the check has sufficient funds in the bank to cover the amount. The person who wrote the check has the ability to spend the money before you are able to cash or deposit it. Because of this, it's possible that you won't get compensated. It is possible that you will be required to pay a fee if you deposit a bad check. This issue can be sidestepped by using a certified check.

The Difference Between Certified Checks and Cashier's Checks

Certified Checks

The money will remain in your account.
You are the one who writes the cheque, and the bank is the one who verifies it.
The payee has faith in the payer.

Cashier's Checks

The money is deposited into the bank straight away.
The cheque is written by the bank.
The payee has faith in the payer.

A cashier's check is an option to consider in place of a certified check. Certified checks and cashier's checks are essentially the same things. When you need to make a payment using certified money, it may be simpler to obtain them depending on the bank that you use. You are the one who writes the check when you are using a certified check. After that, the financial institution verifies that you have the funds in your account to pay for it. When the check is deposited or cashed, the money will come from your account rather than the check. When you pay the bank using a cashier's check, you have the option of either handing over cash or having the funds taken directly from your account. After that, the bank will produce a check that is made out to your payee. When the check is finally cashed, the money will not come from your account but rather from the bank's account instead. Depending on the kind of account you have, you could be required to pay a nominal fee for the service of getting a certified or cashier's check. However, this is not always the case. There is not much of a distinction between a cashier's check and a certified check from the perspective of the person receiving payment. Both of these options are considered to be guaranteed funds.

Possible Substitutes for Certified Checks

When you are making a purchase, there are other methods available to guarantee payment.

Money can be transferred straight from one bank account to another using wire transfers. When the cash finally appears, the recipient will know without a doubt that they were sent.
You can typically obtain money orders, also known as prepaid vouchers, via the United States Postal Service.
Your recipient can feel more secure about the transaction if you provide them the choice to pay in cash whenever possible. Cash might not be the most convenient option, however, for more substantial purchases.

The Danger of Using Certified Checks

Con artists love to use certified funds and cashier's checks alike as their go-to financial instruments. These individuals can write a phony check in the belief that they would be able to utilize it to make a purchase before their con game is discovered. Before determining whether or not all of the funds in a check are available, many banks will immediately make available the first $5,000 (or sometimes $5,525) of the check. But the monies are not considered to be cleared until the bank that is holding them has confirmed that they are genuine, regardless of whether or not the bank made money immediately accessible to the payee. If you have any reason to suspect that the check is a forgery, you should contact the bank that certified the check in order to confirm that it was issued legitimately. You should avoid using the phone number that is printed on the check and instead use a number that you know to be reliable. A phony check will be accompanied by a phony phone number. You can also try to acquire cash immediately by taking the cheque to a branch of the same bank from which the funds are coming and presenting it there. A teller might be able to detect any issues that arise.

Key Takeaways

A verified check is considered to be a certified check if the bank has determined that there is sufficient money in the checking account to cover the check.
When you need to make a secured payment, such as for a down payment, you can use these checks instead of writing cash.
There are also alternative ways to deliver certified monies, such as through the use of cashier's checks and wire transfers.
There is still the possibility of fraud with these checks.