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. Crossed Check

    Any check that is crossed with two parallel lines, either across ...
  4. Money Order

    A certificate that allows the stated payee to receive cash on-demand, ...
  5. Rubber Check

    Another name for a "bounced check." A rubber check is a slang ...
  6. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
Related Articles
  1. What's the difference between a bank ...
    Investing

    What's the difference between a bank ...

  2. An Investor's Guide To Bank Stress-Testing
    Investing Basics

    An Investor's Guide To Bank Stress-Testing

  3. What is the difference between a state ...
    Credit & Loans

    What is the difference between a state ...

  4. How Bank of America Holds 1/8 of All ...
    Stock Analysis

    How Bank of America Holds 1/8 of All ...

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center