Does a Cashier’s Check Need to Be Made Out to Someone?
Understand the structure and secure handling of cashier's checks, ensuring valid transactions and assured funds for all parties.
A cashier’s check is a payment instrument drawn from the bank’s own funds, rather than an individual’s personal account. It is signed by a bank cashier or teller, which means the bank itself guarantees the payment. This makes cashier’s checks a secure form of payment, often preferred for large transactions like purchasing a car or making a down payment on a home.
Payee Information Requirements
A cashier’s check must be made out to a specific payee, which can be an individual, a business, or another entity. Banks typically require the full, legal name of the intended recipient for security. This practice helps ensure the check can only be cashed or deposited by the designated party, reducing the risk of fraud.
Making a cashier’s check payable to “Cash” is not permitted or highly discouraged by financial institutions. This is due to the significant security risk involved, as a check made out to “Cash” can be redeemed by anyone who possesses it. This compromises the inherent security of a cashier’s check. If the purchaser wishes to receive the funds themselves, they can have the check made out to their own name. This makes it a bank-guaranteed instrument payable to the purchaser, which they can then endorse for deposit or cash.
Obtaining a Cashier’s Check
To obtain a cashier’s check, the purchaser must provide information to the financial institution. This includes the exact amount the check should be for, as this cannot be changed once the check is issued.
The purchaser also provides the full, legal name of the payee. Valid government-issued identification, such as a driver’s license or passport, is required to verify the purchaser’s identity. Funds for the check, along with any applicable fees, are typically drawn from the purchaser’s checking or savings account, or can be paid in cash. Fees typically range from $5 to $15, though some banks waive them for certain account holders.
Accepting and Depositing a Cashier’s Check
When receiving a cashier’s check, verify its authenticity to protect against fraud, as counterfeit checks exist. Contact the issuing bank directly to confirm validity; do not use any phone number provided on the check itself, as this could be part of a scam. Examining the check for security features like watermarks, security threads, and consistent printing also helps identify genuine checks.
To deposit the check, the payee must endorse it by signing the back exactly as their name appears on the front. If the name is misspelled, it should be endorsed with the incorrect spelling first, followed by the correct spelling. Cashier’s checks can be deposited at a bank branch, via an ATM, or through mobile deposit. While cashier’s checks are guaranteed funds, banks may still place a hold on the deposited amount, though funds are often available the next business day for in-person deposits. For larger amounts, or if the bank has reason to suspect fraud, holds can be extended, sometimes up to several business days.