Cashier's Check Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Cashier's Check, written in plain English, along with examples of how it is used.
What is Cashier's Check?
(n) Cashiers check is the check drawn on their on account or on their own branch, issued to a customer on receipt of the equal amount, naming a third party as the payee at the request of the customer. It is also called as a bankers check. It differs from the draft mode, here the check is drawn on self and is paid to the payee or credited his account immediately
History and Meaning of Cashier's Check
A cashier's check is a financial instrument that is guaranteed by a bank. It is similar to a personal check but is issued by a bank, and the bank guarantees that the funds will be available to the recipient. Cashier’s checks first appeared in the United States in the early 1800s and were initially known as "bank checks."
The use of cashier's checks became widespread in the early to mid-1900s, as people needed a more secure method of making large payments. Because the bank guarantees the funds, cashier's checks are often used for high-dollar transactions such as real estate purchases or the sale of a vehicle.
Examples of Cashier's Check
- Jane needs to purchase a car from a private seller but does not want to carry around a large sum of cash. She goes to her bank and requests a cashier's check for the agreed-upon amount, which she can then give to the seller.
- John is buying a house and needs to provide a large deposit to the seller's real estate agent. He obtains a cashier's check from his bank and gives it to the agent as proof that the funds are available.
- Sarah is sending a large sum of money to her parents who live overseas. She obtains a cashier's check from her bank and mails it to her parents, who can then deposit it in their local bank.
Legal Terms Similar to Cashier's Check
- Certified Check: A check that is guaranteed by the bank on which it is drawn.
- Money Order: A financial instrument purchased with cash, check or debit card, typically used for smaller payments.
- Traveller’s Cheque: A check designed to allow customers to access funds from anywhere in the world.