Cashier's Check

AAA

DEFINITION of 'Cashier's Check'

A check written by a financial institution on its own funds. It is then signed by a representative of the financial institution and made payable to a third party. A customers who purchases a cashier's check pays for the full face value of the check and usually also pays a small premium for the service. These checks are secured by the funds of the issuer - usually a bank - and include the name of a payee (the entity to which the check is payable), and the name of the remitter (the entity that paid for the check).

INVESTOPEDIA EXPLAINS 'Cashier's Check'

An individual could use a cashier's check instead of a personal check to guarantee that his or her funds for payment are available. A cashier's check is secured because the amount of the check must first be deposited by the individual into the issuing institution's own account. The person or entity to whom the check is made out is then guaranteed to receive the money when cashing the check.

Cashier's checks differ from certified checks in that the funds owing on a cashier's check are taken from the issuer's account, while the funds owing on a certified check are taken from the remitter's account.

RELATED TERMS
  1. Canceled Check

    A check that has cleared the depositor's account and has been ...
  2. Drawee

    A legal and banking term used to describe the party that has ...
  3. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a ...
  4. Check

    A written, dated and signed instrument that contains an unconditional ...
  5. Certified Check

    A type of check where the issuing bank guarantees the recipient ...
  6. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
RELATED FAQS
  1. What's the difference between a bank guarantee and a letter of credit?

    A bank guarantee and a letter of credit are similar in many ways but they're two different things. Letters of credit ensure ...
Related Articles
  1. Investing Basics

    An Investor's Guide To Bank Stress-Testing

    Just how are bank stress tests performed and what is the logic behind them? And is a stress test useful for evaluating a bank's stock?
  2. Stock Analysis

    How Bank of America Holds 1/8 of All U.S. Deposits

    Bank of America isn't America's central bank, but given its size and spread, you could be forgiven this misapprehension.
  3. Stock Analysis

    JPMorgan Chase: Too Big (And Profitable) To Fail

    If there's any bank that's too big to fail, JPMorgan Chase & Co. may very well be the best example. Just look at its return on equity.
  4. Stock Analysis

    How Wells Fargo Became The Biggest Bank In America

    How does WFC make money? They lend it out at a higher rate than they borrow it at. Simple, right? But the real story is how proficient they are at it.
  5. Bonds & Fixed Income

    Introduction To Commercial Paper

    Commercial paper is a short-term instrument that can be a viable alternative for retail fixed-income investors looking for a better rate of return on their money.
  6. Savings

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  7. Investing Basics

    The Role of Commercial Banks in the Economy

    We interact with commercial banks daily to carry out simple financial tasks. That said, the function and creation of a commercial bank is anything but simple.
  8. Investing Basics

    How Banks Set Interest Rates On Your Loans

    On the face of it, figuring out how a bank makes money is a pretty straightforward affair. A bank earns a spread on the money it lends out from the money it takes in as a deposit. The net interest ...
  9. Economics

    Inside National Payment Systems

    Investopedia explains: The global interconnection of U.S. payment systems makes commerical and financial transfers possible.
  10. Personal Finance

    New Mortgage Rules For 2014

    New mortgage rules are set to take place next year by the Consumer Financial Protection Bureau, which will make lenders screen home loan applicants in greater detail.

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center