Are you planning to buy a house, car, or anything big, and the dealer/merchant is saying that only the banker’s check will be accepted? Many sellers say this, and people have no idea what this check is.
Also, there is a trend that whenever someone has to sell anything expensive, they specifically mention in the advertisement that payment will only be made through Banker’s or Cashier’s check.
Thus, it is important for you to know everything about this check and what its purpose is.
Check which issues money from the bank’s own fund is known as the Bankers check or Cashier check. It has many purposes, but the main one is to provide the guarantee that the check will not bounce when anyone uses it to buy something. So, it is considered better and more reliable than personal checks.
Wondering how you can get Banker’s check? Then keep reading!
A banker’s check simply means that the bank or union party writes the check for you. You can use this check to buy anything that costs a lot. It is preferred as only the bank funds are used whenever you give this check to another party and they cash it in.
Yes, it’s true. In Banker’s check, funds are not drawn from your own personal account. So, you are also free from the worry of maintaining the cash in your account.
The three main features of Banker’s checks are:
- A Banker’s check can not bounce or get rejected unless it is fake.
- A Banker’s check is valid till a specific period.
- Every seller trusts it. All the information put on the Banker’s check is what makes the seller feel comfortable in accepting it.
On the Banker’s check, there will be the name of the bank issuing the check and where it is located. You can see this in the upper left corner.
In the middle, there will be Payee’s name as the Banker’s checks are not blank, the amount (both in alphabets and numerical value), and the most important thing- a cashier’s signature.
A cashier’s signature is a guarantee that this check is valid, authentic, and will not bounce. That is why this check is also known as a Cashier’s check. It is generally a printer signature. Furthermore, some banks and credit unions have the policy that the executive’s signature is also mandatory for issuing a banker’s check.
To make everything safer, banks might also put watermarks, use color-shifting inks, and some other features like bond papers on the check.
Now, let’s discuss the purposes of the Banker’s check in detail!
There are different reasons why Bankers checks are used. The common thing between them is the safety you and the seller feel whenever there is a lot of money involved.
The main purposes of a Banker’s check are:
There are high chances of checks bouncing when the payment involved is high. So, parties tend to avoid personal checks if the money involved is a huge sum and only prefer Cashier’s or Banker’s checks.
Generally, Banker’s checks are generally used to pay for the house, car, or large purchases.
There is a guarantee that Banker’s check won’t bounce. It is signed by the bank’s cashier on behalf of the bank.
On some checks, bank executives also need to sign the check. So, the payment transfer is safe without any fear of fraud.
Many merchants or sellers have the policy of only accepting the Banker’s check. This is because most of the time, personal checks bounce, which causes troubles and frustrations for the vendors.
But there’s more to it.
Banker’s checks are settled faster than personal checks. Banks quickly process the payments if the check is a Cashier’s check. On the other hand, personal checks take a few more days.
Involving a banker’s check as a transaction method is always safe. You have the record that you have received a check that the seller cash in to make the money transfer successful.
This kind of record or receipt is not involved in case you give cash. Furthermore, carrying thousands of dollars in a bag is always too risky.
So, one more purpose of a banker’s check is to relieve you from carrying thousands of dollars and help you keep the record.
Wondering how you can get a Banker’s check? Then continue reading.
Getting a banker’s check is not a hard thing. You can just follow some steps, and the bank will gladly give you the check.
Almost every bank and credit union offers a cashier’s check to the account holders. But you will first need to open a “Checking Account” before you apply for it.
When you open it, follow these steps:
- Go to the Bank and request the Teller or cashier to assist you with the Banker’s check. The cashier will describe to you everything you need to have in order to proceed. You can also email the bank or call the helpline to know about it and then bring everything with you to the bank.
- To begin with, the cashier will ask you to pay the amount and a small fee for the check. This amount will be printed on the cashier’s check while the fee is about the services the bank is providing. Banks usually charge around 10 to 20 dollars, so make sure you have the extra money in addition to the amount you are depositing. Bank of America charges 15$ for the Banker’s check. To learn about your bank, you can just call them to know or pay a visit to any nearby branch.
- After depositing the money, you will need to provide your personal identification. Banks only accept government-issued identities, so make sure you bring them with you.
- Then, you will again have to inform them about the exact payment, the name of the Payee, and any additional details the staff might ask.
- The cashier will then verify the information, re-check the money, deposit it, and then give you a receipt. You must keep the receipt with you safely and don’t lose it. If the banker’s or cashier’s check somehow gets stolen, you can file a complaint, and this receipt will be asked for in that process.
- The cashier will then sign a check and hand it over to you. Now, it’s official. You can then use it for larger payments without worrying about the check bouncing.
You have given the Banker’s check to the seller/merchant, and now both of you are waiting for it to be cleared, but when does it happen? How many days does it take to clear a cashier’s check?
Generally, it takes around four to seven business days for a Banker’s check to clear. It is highly unlikely that banks will take more time as a cashier’s check gets settled faster than any other check. As soon as it is cleared, the money will be transferred to the Payee’s account.
You should take some precautions when paying with a Banker’s check.
Make sure you take care of the check properly. If you lose it, then chances are the person who finds it might use it illegally.
Even if you lose it, don’t get worried. You can go to the bank and get your new Banker’s check again. However, you will have to get an indemnity bond equal to the amount you deposited to get the check.
This is done to avoid the cash-ins of both of the checks (lost/stolen and the replacement). Usually, it takes from one to three months to get the replacement.
Also, keep a record of the Banker’s check. Note the issue date, who you are going to give, purposes, etc., in a diary or computer file.
It will help you keep track, which is an extremely crucial thing to do if you are dealing with large amounts of money.
So, what is a Banker’s check, and what is its purpose?
A Banker’s check is a legit check, and if anyone cashes it in, the money will be taken from the Bank’s fund.
Its main purpose is to guarantee money transfer as personal checks tend to bounce on large purposes. So, those who are buying houses, cars, or making any larger purchase use Banker’s check to avoid any undesirable situation.
Also, many sellers and merchants only accept Banker’s checks, not Personal ones. One more reason why people are now preferring Banker’s check is that it is easy to keep track of everything.
Therefore, if you are buying anything expensive, I suggest you also use a Banker’s check!