To understand what a banker's check is, also called a "cashier's check," we first need to understand what a personal check is. A personal check represents an instruction to transfer a sum of money from the drawer's account to the payee's account. When the payee deposits the check into their account, the check is verified as genuine, and the transfer is performed. An individual with a checking account has the authority to draw checks against the money housed in their account. It's impossible to predict when a check will be deposited after it is drawn. The funds represented by a check are not transferred until the check is deposited and cleared, so it is possible that the drawer's account may not have enough money in the account to fulfill the transfer when the check is deposited. When this happens, a check "bounces" and the payee receives zero money. For this reason, checks are seen as less secure than cash. A banker's check offers the security that a personal check lacks. A banker's check is a check that is drawn from the bank's own funds and signed by a cashier. The bank guarantees that the check will be cashable, so the person receiving the check knows with certainty that it will not bounce. Banker's checks are typically used to cover larger purchases, such as cars or houses—that way, the person selling the car or house does not have to rely on the credit and good faith of the buyer. While difficult to duplicate, banker's checks are notorious for the many scams Here is what you need to know if you are getting a banker's check:Personal Check vs Banker's Check
Personal Check Definition
Banker's Check Definition
Purpose of Banker's Checks
How to Get a Banker's Check
Banker's Check FAQs
A banker’s check is a check that is drawn from the bank’s own funds and signed by a cashier.
The bank guarantees that the check will be cashable, so the person receiving the check knows with certainty that it will not bounce.
Banker’s checks are typically used to cover larger purchases, such as cars or houses—that way, the person selling the car or house does not have to rely on the credit and good faith of the buyer.
Visit your local bank and request the check from the teller, and then pay the check amount and any applicable fees.
The funds represented by a check are not transferred until the check is deposited and cleared, so it is possible that the drawer’s account may not have enough money in their account to fulfill the transfer when the check is deposited.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.