Certified Check
Do you know the difference between a cashier's check and a certified check?
A certified check is a bank check that is provided by your local bank for a fee. When you produce a certified check for payment, it indicates that your bank has investigated to ensure that you have enough funds in your account to make the payment. The bank has certified that this is the case before providing you with the check. The money that is in your account is transferred to an internal account belonging to your bank until payment is received. This means that you cannot “bounce” a check and the person you are paying is guaranteed that you have the full amount in your account.
Certified checks used to be highly popular for conducting a range of transactions, such as purchasing large consumer items, cars and property. Many sellers would insist that payment was made via certified check. This offered the seller extra security and peace of mind knowing that he would not have to follow up on bounced or returned checks.
However, certified checks are not usually offered by most major banks today. Instead they have been replaced with the bank check or cashier's check. This type of check also guarantees that you have sufficient funds to pay for your purchase. However, instead of being transferred to an internal bank account, you pay the bank directly when you purchase a cashier's check. The bank then gives you one of its own checks to make your transaction.
Certified checks and cashier's checks are most commonly used when the person you are purchasing your goods from has little knowledge about your financial situation. For this reason, certified and cashier's checks indicate that you are indeed trustworthy and are guaranteed as so by your bank. It is not possible for you to stop a certified or cashier's check once it has been handed over, so the seller is fully aware that the funds are always guaranteed.
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