What is a Certified Check? (And When Should You Use One?)

Banks certify checks to confirm the signature is valid and funds are available. But when should you use certified checks?
Last updated June 10, 2022 | By Christy Rakoczy | Edited By Yahia Barakah
man writing a check

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Personal checks are a common method of payment, but they aren’t flawless. There are certain downsides to them that matter in some situations.

For example, when an individual or company receives a personal check as a payment method, they have no way of confirming that the check is valid and funds are available. A certified check solves some of these downsides because a bank certifies it by verifying the signature and fund availability.

But how can you get a certified check and when should you use one? And does this type of check have its own downsides?

In this article

What is a certified check?

A certified check is a safer alternative to a personal check. It’s a check certified by a bank for validity and availability of funds.

A bank account holder writes personal checks to pay for goods or services. But there's no way for someone who accepts the check to make sure there is money in the account to pay the promised amount until they try to cash it.

A certified check is different. The account holder still writes and signs the check. But the bank verifies the validity of the account holder's signature and confirms there is enough money in the account to clear the check. The bank sets aside the amount of the check to ensure the funds remain available.

Certified checks are similar to cashier's checks in that both provide more assurances to the check recipient. But cashier's checks are issued directly by the bank and include the bank’s phone number and address. They are not connected to the person's account making the payment.

When to use a certified check

Certified checks could be used for large purchases when the buyer and seller do not know each other. Examples could include:

  • Foreclosure auctions
  • Home down payments
  • Car sales
  • Other large transactions between two strangers

The main benefit of certified checks is reduced risk for their recipients compared to personal checks. Because the bank has verified the funds are set aside to pay the check, the payment recipient doesn't need to worry about the check bouncing.

Buyers also benefit from not having to obtain and hand over a large sum of cash, though they likely need to visit a local bank to get their check certified.

How to get a certified check

Learning how to get a certified check might require a few extra steps compared to simply learning how to write a check.

Some, but not all, banks issue certified checks. You typically need to go into your local bank branch to get a certified check. This step is usually required to verify your signature and to receive the bank’s stamp on the check you’d like to certify.

You may generally need to provide:

  • A photo ID to prove your identity
  • Your account number to verify that you have the needed funds
  • A check for the bank to certify

Once the bank teller confirms your signature, they would make sure the requested amount of money is in the account and set that sum aside, and provide you with the certified check.

What are the fees for certified checks?

The fees you pay for a certified check may vary from one financial institution to another. Some certified checks might not have any fees, whereas some may have a fee up to $15.

Some banks might also waive the fee for certain customers, such as those with large deposits in their accounts. But overall, a certified check may be cheaper than a cashier's check.

However, unlike cashier's checks, you’re usually restricted to getting certified checks from your financial institution or bank. Your bank uses its access to your banking information to verify that you have the funds available in your account.

Are certified checks safe?

Certified checks come with a stamp, signature, or other unique markings from a bank to show that the check has been certified and is valid. When a bank certifies a check, the check’s sum is held aside for its recipient.

Certified checks could be safer than personal checks, and because they’re a form of a personal check that has been certified, it’s usually safe to send them in the mail as well.

Certified checks could also be a more convenient method to transfer money than cash because you don't have to deal with a large sum of cash that you can’t mail.

Potential risks of certified checks

Keep in mind that criminals may attempt check fraud by forging and using fake checks. If you receive a certified check, you may wish to contact the bank that certified it to confirm its validity.

If you write, certify, and mail a certified check and that mail is lost, the issuing bank typically requires you to provide an indemnity bond for the amount of the lost check. An indemnity bond is an insurance policy that verifies that the bank will not be responsible for the funds if the check was recovered and cashed out.

The indemnity bond also protects the bank if it issues a new certified check in place of the original check yet the lost check was found, and both checks were cashed out. However, acquiring an indemnity bond might be challenging and often adds additional cost for you as the person who wrote the check.

The cost of this bond is usually a percentage of the amount you’re getting it for. This percentage depends on your credit score, income level, and financial situation.

4 alternatives to certified checks

There are several options that offer similar functionality to certified checks:

1. Cashier’s checks

Cashier’s checks are usually issued by banks and credit unions to customers for a small fee. They could be safer for receiving a large sum of money than personal checks.

The main difference between a certified check versus a cashier's check is the person or entity writing the check:

  • Certified checks are written by an individual who has an account at the certifying bank. The funds are drawn from that person's checking or savings account.
  • Cashier's checks are written and issued by a bank after someone requests the check and provides the money to the bank. That’s why a cashier's check would have the issuing bank's name and address.

2. Money order

You could get money orders at post offices, some retail stores, financial institutions, and money stores such as Western Union. The U.S. Postal Services allows you to place up to $1,000 in a domestic money order or $700 in an international money order.

You usually pay for a money order with cash or a debit card, but most places would not accept credit cards. As the payee, your payment also includes a small fee. The recipient would then cash out the money order at a post office, a bank, or a retail store that supports money orders.

Money orders could be a safe form of payment method because they are prepaid, so there is no risk the funds won't be available.

However, there is a risk that a money order might be fraudulent or fake. One simple way to verify the validity of a money order you received is to call the Money Order Verification System at 877-876-2455.

3. Wire transfer

Wire transfers are a form of non-physical transfers that move money from one bank account to another through an electronic banking system. You’d usually wire money via a bank or a financial institution for a fee.

Domestic wire transfers might be processed in a single business day and allow you to transfer money directly from the sender's account to the recipient's account if enough funds are available.

However, if the account doesn’t have sufficient funds, the transfer would fail, and the bank might charge the sender an overdraft fee. That’s why wire transfers don’t offer the same level of guaranteed payment that certified checks have.

Due to their speed, wire transfers are usually final after they are initiated. That’s why senders need to make sure they are transferring to a legitimate recipient, as it’s difficult to get funds from a transfer back.

4. Payment apps

Online payment apps like Zelle and Cash App make it possible to send and receive money quickly and easily.

These apps usually allow you to transfer funds to a recipient immediately. Fees may vary depending on your funding method. Some apps even offer free transfers if you use your bank account or debit card.

The downside of payment apps is that it's difficult to stop payment or recover the money you sent following an erroneous transfer. Hence, it’s important to double-check the identity of the person you’re sending money to.

FAQs

Should I accept a certified check for my car?

It’s usually safe to accept a certified check as payment for a car. Although an individual writes the certified check, their bank confirms that the check is valid and that there are enough funds in the account. The bank also places a hold on the funds it would use to pay the check.

You could confirm the validity of a certified check by contacting the issuer. You could also choose to request a cashier’s check instead. This would be a check written directly by a bank or a financial institution. As with certified checks, you could contact the issuing bank to confirm its validity and avoid fraudulent checks.

How long does it take to get a certified check?

Generally, getting a certified check in a single visit to your bank is possible. If your bank offers certified checks, you could visit a local branch and request a certified check from the teller. Make sure to have your ID, account number, and the check you’d like to certify.

The teller will verify your signature and availability of funds before stamping or certifying your check.

Can a certified check be a scam?

A certified check could be fraudulent. This could occur if a scammer forged the check, the signature, or the watermark the bank would usually place. A simple way to confirm the validity of a certified check is to contact the issuing bank directly. You’d find the name of this bank on the check.

Bottom line

Certified checks could be a more secure method of payment than personal checks because a bank certifies that the funds are available and the signature is valid.

However, not all banks offer certified checks. Some banks may use cashier’s checks or only support wire transfers. If certified checks are essential for your personal finance, you could make sure to open one of the best checking accounts or work with one of the best banks that offer them.

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Author Details

Christy Rakoczy Christy Rakoczy has a Juris Doctorate from UCLA Law School with a focus in Business Law, and a Certificate in Business Marketing with an English Degree from The University of Rochester. As a full-time personal finance writer, she writes about all things money-related but her special areas of focus are credit cards, personal loans, student loans, mortgages, smart debt payoff strategies, and retirement and Social Security. Her work has been featured by USA Today, MSN Money, CNN Money and more, and you can learn more at her LinkedIn profile.