Yes, there are. Also known as cashier’s checks.
They won’t bounce, but the problem is that they can be forged.
Because they don’t always have the funds themselves, perhaps. They loan out most funds and keep a small portion as reserves, and it can take a day or too to make sure they have enough reserves from incoming cash to cover outgoing cash, and to borrow money if they don’t.
Trust matters. I just bought a used car from a private seller with a cashier’s check that she didn’t clear at the bank before handing me the keys. She trusted me enough to know I wasn’t a forger. Though I don’t know if I would trust anyone at all unless I knew them already. And I doubt she would have taken a personal check.
Let me just say that you shouldn’t take a check for the exact amount, under, or over from anyone you don’t know. And by know, I mean you know where they live, where they work, and they’ve been around for a while, and have something to lose if you come after them for a bad check. You don’t have much chance of collecting if something goes wrong otherwise.
Something going wrong doesn’t just mean the check didn’t clear either, and I don’t mean overnight clearing. There are all sorts of scams out there including ones where your bank account is going to end up being sucked dry after you thought you had the money free and clear. There’s no reason someone who has a valid check can’t turn it into money. If it’s the weekend, or they need a couple of days from an out of state bank or something like that, take a cash deposit and hold it for them. But don’t let go of the item until you have cash in hand.
There are many scams, most pretty well documented, relating to the private sale of cars/caravans/antiques/collectables - in fact anything that sells for enough money to make the scam worthwhile.
Most depend on the gullibility and greed of the mark - seller or buyer. Some [many] people, faced with a smooth talking con artist, who promises easy money for no risk, are taken in, even in the age of instant communication.
It really doesn’t matter where you advertise a sale. Craigslist, Ebay, Local paper, trade magazine, if the scammers spot it, they will crawl out from under their rocks and get to work.
I recently messed up with my account, overdrawing. A first payment was made, funds transfered. Then, a second one came in three days later, but there wasn’t enough money left, so they…paid it but retroactively cancelled the first one (can’t understand why, either.They told me that they had 5 days to cancel a fund transfer and that when there was an overdraw, they canceled first the oldest ones still cancelable rather than the most recent ones. I can’t conceive a reason why but that’s their policy, or maybe a regulation).
In any case, the first one was a transfer to another account. So they get the money, and my bank took it back several days later. If I had meanwhile made a new payment from the secound account, a verification would have showed that the money was there. But several days later, this money would have retroactivly vanished and presumably the new payment from the second account would have been retroactively canceled too.
And that’s with relatively reliable money transfers. With a check, the money might be there when I write it, but have disappeared before you try to cash. So even if the verification was taking only some seconds, it wouldn’t be a guarantee that the check would ever clear.
I think cashier’s checks are a different thing. Isn’t it a check written by the bank itself?
A certified check would be a personal check, but with the bank guarantying that the money is there and will be held until the check is cashed, so it won’t bounce, regardless how many expenses I make before you cash my check.
Yeah, I looked it up and you’re right. But they are effectively the same thing when it comes to the recipient - a check that the bank backs up as having funds to cover it.
You have to realize that this is the banking industry that, directly after 9/11, was in chaos because all the planes were grounded and so checks couldn’t get to where they needed to go. That’s right, as late as 2001, checks were still being put on planes and flown across the country just so they could be processed. It finally took an act of Congress in 2004 before banks could send each other digital images of checks… which were then printed onto a piece of paper to be processed.
This is not an industry known for being on the cutting edge of technology.
And in case anyone missed it, cashier’s checks and certified checks can be forged. If they can get one of those they can also get the cash. Don’t take anything but cash.
Also I forgot to mention. I told the cops that the two girls made off with my car after giving me a bad $300 check. I had their information written down, I made handmade copies of their drivers liscenses. I forget exactly what he said, but the cop said it was a “civil matter”, and I said “I bet you if I go to a business and buy a bunch of merchandise with checks I know are bad, they could call you and I’d end up in jail somehow.” He shrugged and left.
Yeah, that makes sense, I was thinking it’s easier to verify checks now, but not that it’s also easier to forge them. I don’t really think of special paper or fancy patterns as security measures, but they used to be.
The bank doesn’t need cash in the vault to honor an electronic transfer.
The problem is that most people think “cleared” means more than it does.
The only thing the bank can verify is that the check points to a valid account and the account has enough money into it. When they say that the check cleared, what they mean is that the bank on the other end has sent the money. They don’t mean that there’s no possible way that the money will be requested back. How could they?
What if the check itself is fraudulent or stolen? There’s no way for either bank to determine that until the account owner notifies them of the fraud. And if stolen property is passed to a third party, well, the third party has to give it back. Sucks to be them, but that’s not a good enough reason to let the first party take the hit. Generally there’s a statutory limit beyond which you can’t claw back the money, but I believe it’s months long (at least) in most places. There needs to be enough time for the original defrauded person to open their bank statements and go “wait a minute…”
You shouldn’t accept a check from anyone that you don’t trust enough to accept an IOU written on a bar napkin.