What Part of a Cashier’s Check Do I Keep?

A cashier’s check serves as a secure payment method, often used for substantial transactions where guaranteed funds are necessary. Unlike a personal check, which draws funds directly from an individual’s account, a cashier’s check is drawn against the issuing bank’s own funds. This means the bank guarantees the payment, providing security for both the payer and the recipient. This makes cashier’s checks a preferred instrument for situations like making a down payment on a home or purchasing a vehicle.

Understanding Your Cashier’s Check

When you purchase a cashier’s check, funds are immediately withdrawn from your account and transferred to the bank’s account, which then issues the check. This process ensures the funds are available and will not “bounce,” providing assurance to the recipient. Cashier’s checks are commonly required for large purchases or transactions where the recipient needs certainty that the payment will clear.

Key Information on Your Check

Each cashier’s check contains specific details essential for its validity and tracking the transaction. It displays the issuing bank’s name prominently, along with the issue date. The exact amount is printed in both numerical and written forms to prevent alterations. The check also lists the payee’s name, ensuring only the intended recipient can cash or deposit it, and includes the remitter’s name for tracking purposes. A unique check number, the bank officer’s signature, and security features like watermarks or security threads are also present.

What to Keep for Your Records

Once a cashier’s check is processed, the original physical check is typically retained by the financial institution that cashes or deposits it. For your records, retain documentation that serves as proof of payment. This includes the deposit receipt or transaction confirmation from your bank at the time of purchase or deposit. Any accompanying stub or remittance advice detailing the transaction should also be kept. A personal copy, such as a photocopy or a clear digital image of both the front and back of the check taken before submission, is also recommended.

Retention Guidelines and Importance

Retaining records related to cashier’s checks is important for tax compliance and potential disputes. The Internal Revenue Service (IRS) generally recommends keeping most tax-related documents for at least three years from the date you filed your original return. For certain situations, such as claiming a loss from worthless securities or significant underreporting of income, records should be kept for seven or six years, respectively. For major purchases like real estate, retain records, including those for cashier’s checks, indefinitely or until the property is disposed of. These records serve as official proof of payment, helping resolve discrepancies or substantiate financial activities.