A cashier’s check, also known as an official bank check, is a payment instrument issued by a bank or credit union to a third party, usually on behalf of a bank customer who pays the bank the face value of the check. In a major transaction, such as buying a boat or a home, a cashier’s check assures the payee that the funds are there because the check is backed by the bank’s funds, so there is no risk of the check bouncing.

The buyer of the cashier’s check pays the bank upfront for the full amount of the check. The bank deposits those funds and then issues the cashier’s check to the designated payee for the amount requested.

The check cannot be cashed by anyone but the designated payee and settlement is usually quicker than with a personal check.

When to use a cashier’s check

Use a cashier’s check when you need to make a large payment and a personal check or credit card isn’t acceptable and paying with cash isn’t safe or practical.

A cashier’s check is a safe, efficient payment method when a large sum of money, generally anything over $1,000, is required.

Some transactions will require a cashier’s check for payment. You might need a cashier’s check to make a security deposit on an apartment, for example, or to cover the down payment on a new car. Consumers often use cashier’s checks to pay a merchant or vendor that requires cash and will not accept personal checks. Cashier’s checks also are used in cash trades that must settle quickly, such as with real estate and brokerage transactions.

A merchant or payee who wants to avoid the risk of a counterfeit check or a check bouncing may require a cashier’s check for its security and guarantees.

(Looking for more options on how to pay someone else, here are six ways to deposit cash into someone else’s account.)

How to get a cashier’s check

You can purchase cashier’s checks at bank or credit union branch offices. Many financial institutions also make them available on their websites or by telephone. Some banks will not issue cashier’s checks to non-customers.

To get a cashier’s check, have a photo identification with you, such as a driver’s license. Have enough cash on hand or funds in your account to pay the bank the full amount of the check. You also must supply the name of the payee, since banks cannot issue blank cashier’s checks. Be sure to keep the receipt for the check.

Some online-only banks do provide cashier’s checks. Some traditional banks offer more than one way to get a cashier’s check. Wells Fargo, for instance, allows its customers to order cashier’s checks in a branch or online. If you order a cashier’s check online, expect to pay a delivery fee.

Fees for a cashier’s check

Cashier’s checks at traditional banks typically cost around $10 to $15. Some banks waive the fee for certain account holders. Bank of America, for example, charges its checking and savings account customers $15 for a cashier’s check, but it waives the fee for account holders who meet certain balance requirements.

If you need cashier’s checks on a regular basis, you may want to find a bank that offers them for free to account holders. Online banks such as Ally Bank and Discover, for example, offer free official bank checks.

If you order cashier’s checks online, either through an online bank or a traditional bank, the bank likely will charge you a delivery fee. Wells Fargo, for example, charges a $10 fee to issue a cashier’s check to its savings and checking account customers, plus an $8 delivery charge for online orders.

Are cashier’s checks safe?

Cashier’s checks are very safe because they are issued by a bank and are paid out of bank funds, not customer accounts. The bank fills in the “payable to” information and only the designated payee can cash the check. Security is a big advantage of using a cashier’s check to make a payment.

Cashier’s checks also settle faster than personal checks. The funds typically are available the next day. Personal checks can take several days or more to clear.

Security features such as watermarks are added to cashier’s checks to prevent or lower the risk of fraud.

If you lose a cashier’s check before you send it, don’t panic: You can get a replacement, but you will need to get an indemnity bond from an insurance broker for the amount of the lost check. The bond assures the bank that it will not be on the hook for two checks. It can take 30 to 90 days to get your replacement check.

Cashier’s checks vs. money orders vs. certified checks

There are a couple of good alternatives to cashier’s checks, which are drawn against the bank’s funds.

If you need to make a payment of less than $1,000, money orders are a good option. They are easier to obtain than cashier’s checks because not only do banks issue them, they are also sold at the U.S. Postal Service and at many grocery stores, convenience stores, check-cashing outlets and gas stations.

You don’t need a bank account to get a money order, and money orders are much cheaper than cashier’s checks. They are not as secure as a bank check, but they don’t bounce because the buyer must pay the vendor upfront for the full amount of the money order, plus the vendor’s fee.

A certified check is another alternative. A certified check is a personal check that has been certified by the bank. The bank certifies that the funds for the amount the check is written for are, indeed, available and are earmarked for the designated payee. The bank also verifies that the payer’s signature is genuine.

How to prevent cashier’s check fraud

If you accept a cashier’s check from someone you do not know, wait a few days before accessing the money to make sure the check has cleared, or check with your bank first.

If you deposit more than $5,525 on a given banking day, the bank can hold anything over that amount until the check has cleared. Banks can extend a hold if it can show that the extension is reasonable.

Bottom line

Cashier’s checks are a safe, reliable way to make payments of large amounts and in transactions where cash or personal checks are not accepted.

Since a cashier’s check is issued by a bank or credit union, and is drawn against the financial institution’s funds, it is not going to bounce. For that reason, cashier’s checks are a popular form of payment.