What Is a Certified Check and How Do You Get One?

A certified check is a recipient's best financial friend -- it's a check written to them by an individual, organization or group that is guaranteed by the bank that handles the check-writer's account.

The bank only guarantees the check after two items are confirmed:

  • The check writer has the money to cover the guaranteed check in his or her account.
  • The signature on the check must come from the account holder and be legitimate.

How to Get a Certified Check

Getting a certified check is easy if you follow these steps:

  1. Contact your bank or credit union and make sure it offers certified checks.
  2. Make sure you have the funds needed to cover a certified check in your bank account.
  3. Walk into a local bank branch and ask a customer service representative to help you properly fill out a certified check.
  4. Be prepared to show your personal ID or driver's license -- it's likely your financial institution will require you to do so.
  5. Pay the fee required to issue a certified check (usually about $5-to-$25, depending on your bank -- credit unions offer the lowest fees for certified checks.)
  6. Hang on to the receipt until the check clears and the money officially changes hands.

On average, a certified check will clear quickly, usually the next business day after the check is deposited by the recipient.

If your certified check is for more than $5,000, most banks require that the first $5,000 of any certified check must be made available to the recipient the next day after the check is deposited. The remainder must clear within two business days, in most cases.

Why the Need for A Certified Check?

A certified check is an important form of payment, lending credibility to the check issuer and providing reassurance to the check recipient that the payment will clear.

A certified check is especially useful in a larger financial transactions where the possibility of using cash is too risky, and where a regular personal check may not prove reliable enough for the payment recipient.

In that regard, a certified check can eliminate the risk of non-payment and satisfy the needs of both the payer and the recipient.

Certified checks are often used on large transactions -- usually for the following transactions:

  • The purchase of a home or vehicle, where an exchange of title is required.
  • Payment for a home or apartment rental (especially if a previous check has bounced.)
  • Payment for the purchase of a business, where again, a large sum of money is likely involved.

Why are certified checks so critical in large-payment situations?

Imagine a scenario where an individual agrees to purchase a second-hand truck from a seller, for a price of $10,000. A certified check for that amount assures the seller that the payment is valid. But if the agreement is for a personal check for $10,000, and the vehicle changes hands, a personal check that bounces leaves the seller holding the bag -- and out one truck.

Personal checks just do not offer the same credibility as certified checks and cashier's checks. There is really no guarantee the money will be there when a personal check is deposited. Certified checks aren't fraud-proof (see our section on fraud below), but they offer a measure of reassurance that personal checks simply cannot match.

Certified Check Vs. Cashier's Check

Certified checks and cashier's checks are similar (both represent guaranteed financial payments), but do have some variances.

For instance, a cashier's check isn't drawn from an individual or company's bank account, like a certified check -- it's actually drawn against the bank itself. With a cashier's check, the check writer simply pays the bank the amount of the check at the teller window, or by having the funds withdrawn out of their account online, and the bank or credit union writes out a cashier's check to the recipient.

When the funds from a cashier's check are disbursed, the money comes out of the bank's account, and not the check writer's personal account. That's the exact opposite of a certified check.

With either a cashier's check or a certified check, the payee knows at once that the money is guaranteed, and that's all he or she is likely to care about.

Potential Fraud Issues with Certified Checks

Financial fraudsters have increasingly turned to issuing bogus certified checks designed to scam recipients, who often have no recourse when they're victimized by check fraud. Given advances in imaging technologies these days, scammers can easily design a check that looks legitimate and passes muster at first glance.

That's why when you receive a certified check, it is a good idea to call the issuing bank as soon as you receive the check and verify the check's legitimacy. Call the bank, cite the check number and the issuer's name, and make sure they can verify the check is legitimate.

It's not easy to spot a phony check, but these red flags should raise your suspicion.

  • The check has a low "check number." Any three-digit number between 101 and 400, or 1001 and 1500 on business checks are signs of a bad check.
  • The font differs on the check. If a check has one font for the customer's name and another for the address, it's probably a fake check,
  • No address. If a check lacks either the customer's address or the bank's address, it is likely a bogus check.
  • Discoloration, shade or suspicious marks on the check. Any variance in color, shading, or any marks on the check could be signs it has been tampered with, and is likely a fraudulent check.
  • The MICR encoding looks suspicious. Magnetic Ink Character Recognition is the formulation of toner used to print the specialized font at the bottom of checks. If it's missing, doesn't match the bank information at the check's bottom, or it doesn't match the check number, look out -- it is probably a bad check.

What Happens if You Use a Bad Certified Check

Even though certified checks are guaranteed, fraudulent checks can come back to haunt recipients even if they take aggressive steps to check for fraud.

Here's what happens when you deposit a fraudulent certified check:

  • You deposit the certified check in your bank account.
  • Your financial institution will credit the payment to your account, usually the next business day.
  • Several weeks later, the issuing bank will discover the certified check is no good.
  • The issuing bank informs your bank of the fraudulent check.
  • Your bank will demand you return the amount of the certified check to the bank, to cover its loss. They may even take the amount of the check straight out of your bank account.

What To Do if You Get a Fraudulent Certified Check

To cut the risk of being victimized by a fraudulent certified check, the payee can take several action steps:

  • Cash the check immediately. The payee can take a certified check to the payer's bank or credit union the same day he or she receives it and try to cash it. If the money isn't there to cover the check, both the bank and check recipient will immediately know there's a problem.
  • Call the bank. A certified check payee can also call the bank and verify the check is good. Not all banks will verify a check over the phone, but many do -- and it is sure worth a try.
  • Be vigilant. Look for the red flags linked to bogus checks listed above and, if you're experiencing any suspicion at all, contact the payer's bank and let them know you suspect a problem.

Through their guarantee of payment, certified checks are a valuable financial payment tool for the check writer, the recipient and the bank -- which earns fees on the processing of the certified check.

Certified checks may not be foolproof, but they do provide a heavy dose of reassurance that payments made on a check are legitimate and that both parties need not worry about payments on a certified check.

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