Question about cashier's check, money order, certified check

Factual Questions
1

I am on the verge of making a major purchase from a private seller. The seller requires a certified or cashier’s check (or, I guess, money order). Reasonable.

My question: Is one better (for me) than the others? To whom do I make it out? If I get a cashier’s check, have it made out to Sally Grimmitch, and then the sale falls through…am I then able to cash it myself? Is Sally the only one who can then cash it?

When purchasing, do I have to indicate the payee? Or can I fill that in myself?

FYI the purchase amount is 3 grand.

Thanks!

mmm

2

Cashier’s checks are when you give the bank $3000 and they write a $3000 for you. A certified check is when you have the bank write a check, but it’s written in your name, and the funds, IIRC, remain in your account, frozen, until the check is cashed.
In both cases, the recipient is generally guaranteed the funds. I don’t know all the minutia of one vs the other and it doesn’t likely matter to the recipient. The differences AIUI is more on your end.
One key difference, however, is that a cashiers check, since the bank writes it out of their accounts, won’t have any of your personal info on it. So, for example, it’s a good way to go when paying bill collectors since it doesn’t give them any access to debit your account on their own.

The check gets made out to the payee. With a cashiers check, I believe the bank is going to fill that out for you. I think you can ask them to leave the payee blank on a certified check.
As for the sale falling through, ask the bank, but I believe if you bring the check back, they can deposit the money back into your account. I don’t think it just sits in limbo forever.

As for which is better, for you, ask about the fees. One is likely cheaper than the other (or free). Get that one.

3

I think we need more detail here. Is the check/mo going to someone not local or out of state? What’s being purchased (just a general idea)? Other options, can you wire from your account/bank to theirs? That’s safer. Seller’s credibility/rating?

Just seems sketchy without more information.

4

Asking for a cashier’s check or certified check for payment is not inherently sketchy in a private transaction. Heck, the seller takes more risk because these checks can still have a stop payment put on them, but at least the seller knows that the funds exist at the time the check was drawn. If you are selling your car or other high value personal property, are you going to accept a personal check? I sure as hell wouldn’t.

5

Where can debt collectors do that without a court order?

6

If you are worried about it don’t do a money order, a certified check from the bank probably offers you more protection that you have proof you paid the person.

7

(Luckily) I’m not all that well versed in dealing with them. It just always seemed to me that it makes sense to give them as little information as absolutely necessary.
I didn’t know they needed a court order (I never really gave it any thought), but some googling says that’s generally the case. Of course, there’s always going to be unscrupulous collectors that are going to ignore the law, do what they want and sort it out later if you put up a fight.
One interesting thing I did run across is that with your account number and possibly your social security number, they apparently can get your account balance. They might not be able to do anything with simply your account balance, but they could probably use it to put some fear into you.

8

I bought a car on ebay about 12 years ago and the seller wanted a cashier’s check. Ok, that seems reasonable. Everything looked good for both parties after arrival and the seller was able to call the bank’s main 800 number in my presence and verify that the check & funds were real. It seemed pretty secure, the seller was certainly satisfied. There was a fee for the check, I think about $8, and it was made clear that I could return it and the funds would be restored if things went bad.

9

I know in vegas it used to be that if you won anything over 500$ you were paid with a cashiers check

But today a “direct wire transfer” is usually the most preferred way to pay for something big … because you don’t have to wait for anything to clear… when I sold my house that’s how i was paid … and its only 12 dollars or so

10

Personal checks are written with an implicit promise that there are sufficient funds, but there is no direct way of verifying it. These other types certify that the funds in fact exist because they are either taken out upon issuing the check, or are paid for with cash.

Money orders usually have a maximum value and can be issued by banks, post offices, 7-11, etc. They do not need a payee name, that can be written in later or made out to “Cash”.

Cashier’s check need a payee upon issuance. Only banks issue them. If there is an issue and it needs to be cancelled, it can be deposited into the issuer’s account. No problem.

A certified check is like a personal check but the bank verifies funds exist. I think they’re less common these days. They will probably want to do a cashier’s check instead.

11

Money orders usually have a limit of $1000. But they typically only cost a buck beyond the face amount which is a lot cheaper than certified/cashier checks cost.

Regardless of what you use, always keep the stub receipt. It is useful in tracking what happened with the payment if anything goes awry later on.

I used a money order once for a bill for $500. The receiver claimed they never got it in the mail. The stub helped confirm it was never cashed. I was able to get the m.o. reissued to me minus an $18 fee which is better than losing the entire 500.

12

Postal is $1000, retailers are often $500. Of course in either case you can buy multiples, but at that point cashier’s checks are potentially safer. But again sometimes someone is buying something and doesn’t yet know who the payee is, so money order is the way to go.

13

The big difference, IIRC, is that you have to have a checking account with the bank for a certified check, because it’s basically a personal check that the bank has certified will be covered. At most banks they’re certified counter checks, though; you don’t write out an actual check. The bank puts a hold on your account for the amount of the check, and it’s for a certain period of time from date of issue (at my bank, it’s 90 days). I don’t think there’s much difference between a money order and a cashier’s check, except that only financial institutions can issue cashier’s checks.

Cashier’s checks are from the bank (ie, the cashier), usually given to an account holder when they wish to make a large withdrawal, and don’t want to carry around cash. They were more common when banks were not national, and if you moved, you needed to close your bank account, and open a new one in your new city. You withdrew your entire balance and got a cashier’s check. So pretty much, you have to have an account with the bank to get a cashier’s check too, but it can be a savings account.

It’s also possible, I think, to get a cashier’s check for a large sum, if it’s so large that it’s beyond the maximum of a money order, but I’m not really sure how it works. I don’t know if it’s made out to you, and you sign it over, or to the person who will eventually receive it. It also depends on the policies of a particular institution whether you need to be an account holder.

Anyone can get a money order from any bank, or any other place that issues money orders. I don’t know if there is a statutory limit to how much a money order can be for (and if there is, they probably vary by jurisdiction), but I do know that my bank will issue them for a lot more than any non-financial institution, and I’m guessing it has something to do with the amount of cash non-financial institutions want to have on the premises.

I once had a landlord require a money order, and would not accept a certified check (actually, they probably would have, but the front desk person was sticking by the “no personal checks” rule to the letter, and her supervisor was not reachable to overrule it). I tried to get a cheap one, but no one other than my bank would issue one for the amount required, so I just bought the expensive one from my bank. It wasn’t that much-- $4, as opposed to $0.75 from another place, albeit, I would have had to get three of them, so it was almost the same price, and less trouble.

14

This is basically it.

A cashier’s check is a check written by the bank to another person. The bank takes the money from you and writes a check to someone else. When the check is cashed the funds come out of the bank’s account, not yours (the bank has already moved money from your account to theirs).

A certified check is just the bank guaranteeing you have the funds in your account to cover the amount. Likely the bank will put a hold on those funds to make sure the check can clear.

Both are pretty secure means of making a payment with the cashier’s check being a bit safer (the bank is backing the transaction personally and the check itself probably has watermarks or other security features).

There is doubtless a difference in fees for what the bank charges for these services and I expect the cashier’s check costs more to do.

15

I should add…

A money order is kinda like a cashier’s check in that you hand over the money and a check, not on your account, is written for you which can be used in a transaction.

The only difference I know of is the amounts. Money orders are usually for smaller things…like $1000 or less. A cashier’s check can be for pretty much any amount.

Also, cashier’s checks are usually hand over without the receiver’s name on it (the person who bought it can write in the name later). A cashier’s check that will be filled out at purchase.

16

Where? I take money orders as well as cash to gun shows I have tables. Every Walmart and grocery store that sells them has a 1K max.

17

Whoops…

Should be:

“Also, money orders are usually handed over without the receiver’s name on it…”

18

Not sure if out of date, but 7-11 was $500, and Google suggests so.

RivkahChaya: theoretically any amount, they’re regularly used for down payments and such.

I don’t know if still current, but Wells Fargo had “Official Checks” for up to $10k, cashier’s after that. They’re functionally identical, only the title up top.

19

They’re functionally identical now, pretty much, but if you ever want to close an account, and don’t want the proceeds in cash, you will get a cashier’s check, period. You won’t get a certified check, because you no longer have an account to write it against, and unless you want to take the unnecessary steps of withdrawing the money in cash, and then converting it into money orders, you won’t get those either.

I’m not even sure if traveler’s checks still exist.

I closed out one of my mother’s accounts after she died, and received a cashier’s check, which I then had to take to my bank and deposit, and get a certified check for half the amount, and sent that to my brother. They had branches of my mother’s New York bank in Indiana, but not in CA, where my brother lives.

20

Thanks to all who responded.

My main concern is that I’m not out the money if the deal falls through, given that the check would be made out to the seller.

And there is nothing “sketchy” going on. I’m buying a piano from a private (local) seller.

mmm