What Is a Certified Check?

A certified check is a legitimate personal check that the payer’s bank has certified, and the funds are held to cover the check. This gives the recipient assurance that the account has available funds to cover the check. 

Certified checks are used in personal transactions between 2 individuals. A standard personal check can be a risk to accept as payment because there is no way to know that there will be funds to cover the payment when the recipient deposits or cashes the check. 

The certification process physically marks the check, indicating that it is a certified check to the recipient. The bank then freezes the funds in your account to cover the check, and most banks won’t release those funds for any other transactions. 

What is a certified check used for?

Certified checks are a practical payment alternative to cash or personal checks for large monetary transactions or when the seller does not know the account holder and wants a guarantee that there are funds to cover the purchase. 

Certain sellers may not accept credit or debit cards, and cash may not be practical if it is a significant dollar amount. The seller may not know the account holder, so a personal check is a risk because there is no way to verify that there are funds in the account to cover the check. A certified check would be the solution to a situation such as this. 

Certified checks protect the buyer, so they do not have to carry a large amount of cash on them, and the seller is given the guarantee the personal check has enough funds to cover the check.

How does a certified check work?

A certified check is a personal check the bank has verified funds are available to the cover. When you go to a bank to have a check certified, you will take a personal check for the corresponding account. The check will have the dollar amount of the transaction filled out and the recipient’s information.

The bank will verify your identity and that you are the account holder. Your bank will then confirm enough funds are available to cover the check amount. If the funds are available, the bank will place a hold on the funds and only release them to cover the certified check. 

The bank will physically certify the check with a stamp that lets the recipient know that the bank has verified your identity and placed a hold on the funds. 

After completing the transaction, the recipient can cash the check or deposit it into their account with the assurance the funds are there to cover the transaction.

How much does a certified check cost?

Certified checks vary in cost depending on what your bank charges. The fee for certified checks ranges from $8 to $15, depending on the bank and the benefits your account offers. Some banks may offer it as a free service as a benefit your account offers.

You will need to contact your bank for pricing and fees.

Certified check vs. cashier’s check

Upon visiting your bank, they may not offer certified checks and only offer cashier’s checks. There are many similarities and differences between cashiers and certified checks. 

A cashier’s check is a check from the bank itself, unlike a certified check which is a personal check that the bank certifies that the funds are available and set aside to cover the personal check.

Certified check

A certified check is a check written from a personal account to cover a purchase. The bank then verifies the funds are available so the bank can place a hold on the funds to only be used to cover the corresponding certified check. Banks certify these checks with a stamp to allow the seller to know funds and identity were verified.

Cashier’s check

Cashier’s checks are a guaranteed form of payment for which the bank has guaranteed payment. A cashier’s check is a check from the bank, not a personal account. The bank prints up a check and funds come from the bank’s account to cover the check. The bank will then remove the funds from your account to cover the check they have made to the seller on your behalf.

Certified check vs standard personal check

A standard check from a personal account can be written to cover a purchase. The issue some sellers have with personal checks from a buyer they do not know is that there is no guarantee funds are in the account to cover the check. 

A certified check is a way for a seller to have a guaranteed form of payment. Certified checks guarantee that funds are in the account and set aside to cover the check. 

How to Avoid Fraud with Certified Checks

Although certified checks are verified, they are still vulnerable to fraud. When you receive a certified check, you must confirm it is not a fraudulent or counterfeit check. 

Some fraudulent checks are easier to recognize because they contain obvious errors like misspelled words and grammatical errors, which are easy to spot. Some counterfeit checks are more sophisticated because technology allows you to copy bank logos and branding off the internet.

There are ways to verify the check’s validity, such as calling the bank that certified the check and confirming that they authorized the check. Make sure to find the bank’s number on your own because the address and phone number on the check could be fake if you try to call.

Conclusion

Certified checks are safe to make a large purchase when a credit or debit card is not an option. Carrying large amounts of cash comes with risks. Individual sellers usually won’t accept personal checks because there is no guarantee that the funds are in the account to cover the purchase. Certified checks are a secure payment method that protects both the buyer and the seller.