Cashier's check is a payment order issued by the account owner with the bank's own funds to favor a third party. In other words, the clearing of this type of check is guaranteed.
When it comes to receiving an important payment, the way in which that value is accessed is extremely important. Anyone who has fallen for the bottomless check scam knows the frustration and bureaucracy behind the correction process.
Due to insecurities like this, conventional checks are falling more and more in disuse. However, this does not mean that it is a dangerous payment method, there are modalities that can protect the user.
If you want to know other secure payment methods on the market, we recommend reading the article: ‘The new forms of payment in the market ‘.
To understand what a cashier's check is and how it works, keep following this post. We have separated the main characteristics of this form of payment to help you ensure your financial dignity. Good reading!
What is a check?
Check is a credit security that works as a cash payment method, issued because of the funds available from an issuer at a particular bank or financial institution to favor a third party.
The creditor organization in question is responsible for managing the cash transactions on that account. That is, the issuance of paper books that have their own model and numbering according to the standards standardized by the Central Bank (BC).
When writing a check, the issuer makes a payment order and the beneficiary receives the amount immediately, simply depositing or withdrawing it.
It is worth mentioning that this transfer only happens when the issuer has sufficient balance in his account bank. Therefore, if there is no balance available, the check is considered unfunded and can be returned.
Issuing a check in these conditions is considered a fraud. If the issuer has the same check returned more than once, its name is registered with the CCF (Registration of Issuer of Checks without Funds).
We will soon explain what a cashier's check is and why it is so important to avoid this problematic situation.
What is cashier's check?
As we have seen, the check is a payment method in which the beneficiary is entitled to receive the amount indicated on the paper document by means of deposit or withdrawal.
However, this transfer does not always occur properly due to the disparity in the account credit, generating a bad check.
The protection against the occurrence of this situation for both the emissary and the beneficiary is precisely what explains what an administrative check is.
The cashier's check works as a kind of contract payment method in which the security of receipt is guaranteed by the bank.
Unlike the other check categories in which the issuer itself completes the transactions, the bank operates the administrative check in the administrative check.
The account holder makes the issuance request to the financial institution that is responsible for checking the credit equivalence available in the account and making the appropriate completion of the document. In this way, the recipient is sure that the check has funds.
Furthermore, after the transfer, the cashier's check cannot be stopped (canceled). The bank ensures that the money is forwarded and protects the beneficiary.
Understanding what a cashier's check is is essential to protect your rights.
Cashier's check: how does it work?
Now that you know what a cashier's check is, understand how it works.
To request a cashier's check, the interested party must contact the bank and verify the possession of the amount to be transferred in his current account. If so, the purchase of the cashier's check is authorized.
This check category works as follows:
- whoever issues the check must have the amount shown on the check in their account;
- the issuer transfers this amount from his personal account to a bank account;
- the issuer must inform the beneficiary's data to the bank;
- the bank creates the cashier's check;
- the beneficiary receives the check with guaranteed funds.
Guarantee of receipt defines what is a cashier's check. Its use offers security and tranquility to the user, both issuer and receiver, since the money moved is in the bank's possession.
When to use a cashier's check?
The administrative check is indicated for payments of exorbitant amounts, such as the acquisition of real estate, automobiles, trips abroad, hospital expenses, among others, since in transactions of this financial size the guarantee is an indispensable factor.
Understand better by analyzing the following example: consider that you have collected money for a good period strictly for buy a car zero in cash, avoiding the hiring of financing, requests for loans, acquisition of debts, among others.
With the amount collected, the next procedure is to make the payment to the concessionaire. Instead of withdrawing this amount and having at least R $ 30 thousand reais in your pocket, you can request a cashier's check and pass it through safely and calmly.
However, even knowing what an administrative check is and understanding the security it offers, its use has fallen into disuse.
This is because the advantages of technologies such as TED (Electronic Transfer Available) and DOC (Credit Order Document) gain the user's preference for practicality.
How to request the cashier's check?
The cashier's check can be ordered directly at the cashier or with your bank branch manager. An issue fee will be charged to initiate the procedure, this amount is the responsibility of the issuing account holder.
The value of this charge varies from institution financial for a financial institution, so it is essential that you do a thorough research to know the values and criteria that each company adopts.
Many banks offer this service to people who are not account holders, which makes research even more necessary.
Having made the choice of the most advantageous institution, it will be necessary to pass on the data of the beneficiary, that is, who will receive the check to get the cash. The necessary data are:
- full name of the beneficiary;
- name of the bank where he has an account;
- your current account number;
- your bank branch number;
- amount that will be issued.
This data is necessary because this check category is also nominal, that is, it requires identification. In the end, safety is what defines what a cashier's check is and exact movement is a requirement.
Finally, the issuer must keep the proof of creation of the cashier's check and the beneficiary of the deposit or withdrawal. Thus, the transaction gains one more tax relief.
How much does it cost to issue the cashier's check?
It is possible to buy a cashier's check at any bank, but not all branches offer these services to non-customers. However, they all charge specific emission charges for that service.
According to data from the Serasa, the fees of the main banks in the country to issue the cashier's check are:
- Santander – R $ 31.60
- Bradesco – R $ 28.90
- Itaú – R $ 24.00
- Original Bank – R $ 25.00
- PAN Bank – R $ 40.00
- Crefisa – R $ 20.00
It is worth mentioning that although some institutions may charge less expressive charges for their pocket, the movement of this type of operation usually involves high amounts.
Therefore, it is necessary to assess the risks and the security issue when choosing to transfer this cash value to another bank.
Who can purchase a cashier's check?
Anyone who knows what a cashier's check is and is interested in making this type of paymento, whether to guarantee greater security to the beneficiary or move high values more easily, you can acquire it.
For account holders at the bank where this order is placed, the process may be more secure. This is because the amount to be transferred in the issuance of the administrative check is already in the institution itself, the movement is made by means of transfer and not by cash as a non-client would do.
Although it is not a restriction, these precautions must be considered. Therefore, as long as you have the money to be handled and the beneficiary's data, anyone can buy a cashier's check.
When it comes to money, there is little care. The choice of the best form of payment and receipt must be carefully analyzed, considering the safety and cost of this movement.
What other types of checks are there?
The following are other common categories in addition to the cashier's check and their respective meanings:
Check to bearer
Check to bearer it is a document that does not indicate the name of the beneficiary. In other words, it can be used by anyone.
To avoid severe theft situations, the central bank do Brasil limited the issue amount of this check category to up to R $ 100.00.
From the amount of R $ 100, the indication of the beneficiary is mandatory by the issuer, whether to favor individuals or legal entities.
This check category is indicated for the payment of high importance, because in situations of loss or theft of the paper document, the amount cannot be deposited or withdrawn without the identification of the beneficiary.
Just as the name suggests, the postdated check is a type of document that establishes a date for its clearing. This period must be stipulated by mutual agreement between the payer and the recipient.
Although the parties are in agreement regarding the value and the future date, for the Bank or financial institution this check remains a cash payment order.
Cross check it is a type of payment that does not allow you to withdraw the amount issued in the paper document. This means that money can only be received through a deposit in a current account or savings.
To identify the check in this category, it is necessary to make two strokes in pen, diagonally in front of the title. This marking must be done in the upper left corner or in the center of the sheet from one end to the other.
Unlike the others, this check category requires extreme attention and avoiding it should be a priority measure. The overdraft is a pre-approved credit line that is linked to the account of the holder.
If the holder issues a check and identifies the lack of funds to cover that amount, the overdraft can be used for that purpose.
It serves as an emergency measure for extreme situations, however it has the highest interest rates on the market. Therefore, they can lead to extreme debt situations and compromise your financial health.
Improve your company by taking care of the financial health of employees
Understanding what an overdraft is becomes a strategic differential, since it is a means of payment that offers not only the guarantee of an inviolable procedure, but also respect for its credibility. After all, it is a security investment.
In addition to knowing how to move their money without being in danger, companies and employees must value the exchange of benefits that encourage productivity at work.
Get to know the HR Consultant UKy tool and learn how the system that implements payment on demand works, that is, employees of a company can anticipate part of their salaries when they need it.
HR Consultant UKy can be one of the most valued benefits for those who work at your company. Talk to an expert and find out more!
Cool huh? Did you understand what a cashier's check is? If you still have any questions regarding this payment method, leave it here in the comments for us. So, one of our experts can help you.