Both Cashier’s check and Certified checks are relatively safe and reliable methods of money transfer as compared to payment done by cash or personal checks as they are backed by some kind of guarantee.

Business transactions involving the transfer of goods or services can be completed prior to actual receipt of the money for payments done by either of these two methods, i.e. Cashier’s check or Certified check. This essentially means that a sellers for instance can act in good faith by shipping the product, knowing that a payment made by a Cashier’s check will not be defaulted.

To elaborate, a Certified check is referred to have been “certified” by the bank of the payer. This means that the bank of the payer guarantees the holder of the certified check that funds will be made available to honor such a check, if and when presented to the bank. To do so, a certified check must be endorsed by the bank and the payer together, which ensures that the check is not defaulted under any circumstance. The bank signature acts as an additional third-party assurance that funds are currently available and will be held in reserve for the particular check. In case if a default in payment through a certified check, both the bank and the payer is liable to face legal action. In case of a forgery, where the bank’s signature has been forged, then the bank is not liable to face any legal action. The same holds true in the event that the check has been outstanding for a time duration longer than the stipulated time mentioned on the check, the bank is absolved of any responsibility of honoring the check.

A Cashier’s check on the other hand is a more secure method of money transfer as it takes the payer out of the scenario completely. A request for issuing a cashier’s check has to be put to the bank by the payer. The payer’s bank then endorses the check as a guarantee to redeem the funds directly from the bank’s escrow account rather than the payers account. The bank deducts this money from the payers account at the time of purchase of the cashier’s check by the payer. Thus a cashier’s check is honored by the bank from its own reserves. Most banks charge a fees for issuing this kind of a check, which is usually a percentage of the entire amount. Mostly a person needs to have an account with the issuing bank for availing this type of a service. A cashier’s check will be issued by a teller only when the payer is present in person at the bank to make the request. Upon presenting the identification details, and confirmation from the teller that sufficient funds are available with the payer, a check is issued.

Mostly the funds from a cashier’s check is available for clearance the next day itself, but in certain cases and above certain threshold amounts, the bank holds the clearance of the check until it gets cleared from the issuing bank.

At a comparative level, a cashier’s check contains more security features that make counterfeiting rather difficult and goes a long way in preventing scam. In case a cashier’s check is lost, banks at times need the purchaser to get an indemnity bond for the amount of the lost check before issuing a replacement. This bond ensures the purchaser is liable for the replacement check.

A certified check on the other just carries an assurance that the signature on the check is genuine and the payers has sufficient funds in his accounts to honor the check.