What Check-Like Tool Can Be Purchased for a Fee?

Alternative payment instruments offer guaranteed funds and enhanced security, often for a small fee. These check-like tools provide a reliable way to make payments, giving recipients confidence that funds are legitimate and available. They are useful for significant transactions or when dealing with unfamiliar parties.

Money Orders

A money order is a prepaid payment method issued by a third party for a specified amount. The payer provides funds upfront, ensuring the money order cannot “bounce” due to insufficient funds. This makes it a secure option, especially for smaller transactions or when a personal check is not accepted.

Money orders are purchased for their face value plus a small fee. The payer fills in the recipient’s name. They are widely available at post offices, convenience stores, banks, and credit unions, with common issuers including the United States Postal Service (USPS), Western Union, and MoneyGram. Recipients can cash or deposit them at various locations, including banks, credit unions, or post offices.

Fees for money orders typically range from less than $1 to about $5. Most money orders have a maximum value limit, commonly $1,000, which means multiple money orders are required for larger payments. They are frequently used for payments like rent, utility bills, or online purchases where a guaranteed, traceable payment is preferred.

Cashier’s Checks

A cashier’s check is a payment instrument issued and guaranteed by a bank, drawing funds directly from the bank’s own account rather than the payer’s personal account. This distinction provides a high level of security and assurance, as the bank itself guarantees the payment. The bank withdraws the specified amount from the customer’s account and then issues a check against its own funds.

Individuals typically obtain a cashier’s check by visiting their bank or credit union branch, providing the exact amount needed, the recipient’s name, and a government-issued photo ID. Funds are withdrawn from the customer’s account or paid in cash. While most banks issue cashier’s checks to their customers, some may offer them to non-customers, though often with additional fees. Some banks also allow ordering cashier’s checks online or by phone.

Fees for cashier’s checks range from $10 to $15. They are commonly used for significant financial transactions where a guaranteed form of payment is required or preferred due to the large sums involved, such as real estate down payments, vehicle purchases, or closing costs for mortgages. Their security features make them difficult to counterfeit, enhancing reliability for high-value exchanges.

Certified Checks

A certified check is a personal check that a bank has verified and guaranteed, confirming that the payer’s account has sufficient funds to cover the check and that the signature is authentic. Unlike a cashier’s check, the funds remain in the payer’s account until the check is cashed. The bank typically “earmarks” or sets aside those funds, preventing their use for other transactions.

To get a certified check, the account holder must present their personal check to a teller at their bank or credit union. The bank verifies the account balance and the signature, then stamps or marks the check as “certified,” often adding a bank official’s signature. This process typically requires an in-person visit. The bank’s certification provides assurance to the recipient that funds are available and guaranteed.

Fees for certified checks typically range between $5 and $20. Certified checks serve as a secure payment method in situations where a personal check might not be trusted but a bank-issued check is not strictly necessary. They are often used for transactions such as rent payments, security deposits, or certain private sales where the recipient desires assurance of funds without requiring a check drawn directly on the bank’s account. A key distinction from a cashier’s check is that a certified check is drawn on the customer’s account with the bank’s guarantee, while a cashier’s check is drawn on the bank’s own funds.