What is a Certified Check?

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A certified check is a one that the check writer’s bank or credit union guarantees, so a payee is sure the money is there to cover the amount.

🤔 Understanding certified checks

Certified checks provide a safer option to accept checks where you know the person or organization has money in their account to cover the check amount. Some individuals or businesses might be hesitant to accept regular checks for fear they will bounce. Once a bank certifies a check, the bank is liable for that amount. So when a financial institution certifies a check, they will usually set aside the amount of money printed on the check. Once you’ve written a certified check, you often cannot stop it being cashed. Certified checks are similar to cashier’s checks, which is one that the writer purchases from the financial institution for the amount listed.


Let’s say you’re selling your car to another individual. Someone has test-driven the vehicle, and they’re ready to buy. The problem is that they want to pay with a check. Checks pose some danger to the payee. After all, the check could bounce after you’ve already signed your car over to the other party. Certified checks provide a way for you to accept a check for the payment without any fear that it will bounce.


A certified check is like collateral on a loan…

When you enter into a financial agreement with another party, they typically want to know that they are going to get the money you promised them. In the case of a loan, this might mean your financial institution requires some sort of collateral to make sure you’ll pay off your loan. In the case of a check, the payee might require that you have your bank certify the check, so they know they’re going to get their money.

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How do certified checks work?

A certified check functions similarly to a personal one. You write a check, and when the person cashes it, the money comes out of your account. The difference between certified and personal checks is that with a certified check, the bank is guaranteeing the payment. They’re promising the person receiving the check that they’re going to get their money.

Since the bank is on the hook for the amount written on a certified check, they’ll often remove or place a hold on that amount of money so you as the check writer can’t spend it elsewhere.

The funds from a certified check don’t clear immediately, but it is pretty close. In most cases, the money will be available the next business day. For certified checks that exceed $5,000, the first $5,000 will often be available the next business day, and the rest will typically clear within two business days.

When do I need a certified check?

A certified check comes in handy when you want to make a large purchase where cash seems unsafe, and the seller can’t or won’t accept electronic payment. Many people are hesitant to accept checks because of the lack of security. After all, if someone writes you a check for an amount of money they don’t have, there’s not a whole lot you can do about it.

Let’s say you were selling an expensive piece of equipment, such as a DSLR camera. Someone hands you a personal check, and you give them the camera. If you go to the bank to cash the check only to discover they don’t have sufficient funds to cover it, you’re now out the money and your camera.

The certified check gives the seller some peace of mind that you aren’t trying to swindle them out of an expensive item. And while certified checks aren’t entirely risk-free, they carry a lot less risk than a personal check.

How do I get a certified check?

You should be able to get a certified check from your local bank or credit union. Depending on your bank, they may or may not offer certified checks. They are usually not as readily available as cashier’s checks and money orders.

First, call the bank and make sure they offer certified checks. If they do, you can visit your local branch to get one set up. You can either have the teller print the check for you or, in other cases, simply write a check, and the bank can certify it.

Your bank or credit union might require a small fee for the certified check. You should also be aware that banks will often set aside the money you listed on the check, so make sure you have the full amount of the check in your account before heading to the bank.

Is a certified check safe?

A legitimate certified check is as safe as cash since the bank is guaranteeing the amount. The bad news is that just like other financial transactions, there is the potential for fraud. And unfortunately, a fraudulent certified check could mean a lot of money for you.

Many banks make the first $5,000 of a certified check available immediately. Let’s say you deposit the check, the first $5,000 clears, and you immediately start to spend that money. If it turns out that the certified check was fake, you are on the hook for the money you spent.

If you’re concerned about the validity of a certified check, you may be able to call the individual’s bank to confirm the funds are there and that the check is legitimate. There are also alternatives you can use that are more secure than a certified check, such as a cashier’s check, where the funds come directly from the bank.

What is the difference between a certified check and a cashier’s check?

Certified checks and cashier’s checks are similar in that they are both official bank checks where the bank is guaranteeing the amount. There’s a critical difference between the two, though.

When you write a certified check, the bank guarantees it, but the money still comes out of your account when the receiver cashes or deposits it. With a cashier’s check, the money comes out of your account earlier than that.

When you go to your bank to get a cashier’s check, you are purchasing the check from the bank for the amount listed. You aren’t writing the check — The bank is. When the receiver deposits the check, the money is coming directly from the bank as opposed to your checking account.

Like with certified checks, the first $5,000 of the amount of a cashier’s check should appear in the receiver’s account within one business day after they deposit it.

Cashier’s checks are more common than certified ones and people might find them to be even more secure because they are coming from the bank rather than the individual.

Are there alternatives to a certified check?

The benefit of certified checks is that the receiver can usually feel confident that they are going to get the money they’re expecting. There are also other options that can accomplish the same goal:

Money orders

A money order is a popular alternative to a check that provides some added security for the receiver. Like a check, a money order is a paper document. In many ways, they are similar to a cashier’s check. You pay the full amount upfront. The entity issuing the money order will print the name of the receiver directly on the document.

Money orders are easier to obtain than certified or cashier’s checks. You’ll still pay a fee for them, but you can get them in more locations. You could purchase a money order at your local bank or credit union. But you can also often purchase them at the post office, convenience stores, supermarkets, and payday loan stores. Money orders often have a limit of $1,000.

ACH transfers

An automated clearing house (ACH) transfer is a way of sending money from one bank account to another using the bank’s ACH number and an individual’s bank account number.

This type of payment is usually either free or very low-cost for both parties. Payments typically take several business days, but they are safer for the sender since they can reverse the transfer in the case of error or fraud.

Wire transfers

A wire transfer is another way to send money from one person to another electronically. The advantage of wire transfers for the receiver is that they are almost instantaneous. This immediateness does make them a little riskier for senders since the money immediately leaves your account, and you typically won’t be able to reverse it.

Unlike ACH transfers, wire transfers generally aren’t free. The sender will have to pay a fee, and depending on the issuing bank, the recipient might as well.

Money-transfer apps

Thanks to technology, it’s a lot easier these days to transfer money from one individual to another without having to carry cash or accept a personal check. Apps and services like PayPal, Venmo, and Zelle allow you to transfer money electronically to another person, often for free. In many cases, these transfers occur instantly, but generally not both free and instant except for bank apps. .

So let’s go back to that example of selling an expensive camera. You’ve listed your DSLR camera for sale online, and someone has come to buy it. Rather than carry a large amount of cash, writing a personal check, or paying for a certified check, the buyer simply brings their phone.

The buyer can transfer money to you via one of the money-transfer apps, and you instantly get a notification saying the money is in your account. The money safely made it to you, so you feel comfortable letting them leave with the camera.

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