A certified check is a type of payment your bank verifies to ensure enough money in your account to cover the amount. The bank “certifies” the check, meaning they guarantee the funds, making it a safer option for large transactions.
It’s often used when people want extra security, such as in buying a car, a house, or other high-value items, because it reduces the risk of bouncing checks or fraud.
People choose certified checks because they provide more trust and assurance to the person receiving the payment.
In situations like real estate deals, legal settlements, or big purchases, sellers or service providers prefer certified checks over regular personal checks due to the added security.
This post will explain how much it typically costs to get a certified check, what influences those costs, and whether there are ways to save on fees.
What is a Certified Check?
A certified check is a type of check that your bank guarantees by verifying that you have enough money in your account to cover the payment.
It’s different from a personal check because the bank confirms the funds are available when the check is written, and they hold the money to make sure it gets paid. With a personal check, there’s no guarantee the money will be there when it’s cashed.
A certified check also differs from a cashier’s check. With a cashier’s check, the bank itself takes money from your account and issues the check from its own funds. In contrast, a certified check comes directly from your account, but with the bank’s certification backing it up.
To get a certified check, you visit your bank and ask them to certify one of your checks. The bank confirms the amount is in your account, marks the check as certified, and sets aside that money to ensure it’s available for the payment.
Certified checks are secure because the bank guarantees that the money is there when the check is written. This process reduces the risk of a check bouncing, which is why people use certified checks for high-value transactions.
Average Cost of a Certified Check
Cost Range
The cost of getting a certified check usually falls between $5 and $15. The exact fee depends on your bank and the type of account you have. Some banks might charge a bit more, while others may offer lower fees.
Fee Variations by Bank
Different banks charge different amounts for certified checks. Large banks often have higher fees, while smaller banks and credit unions may offer lower costs.
Online banks might charge less or even waive the fee altogether if you have a premium account. In-person visits at traditional banks tend to cost more compared to online options.
Factors That Affect the Cost of a Certified Check
Type of Financial Institution
The cost of a certified check can vary depending on the type of bank you use. National banks often charge higher fees, ranging from $10 to $15.
In contrast, credit unions and smaller local banks may offer certified checks for as little as $5. Online banks can also be more affordable, with some charging lower fees or offering certified checks for free in certain cases.
Customer Relationship
If you have a long-term relationship with your bank or hold a premium account, you might get a discount or even have the fee waived. Many banks offer perks for loyal customers, including reduced fees for services like certified checks.
Geographical Location
The cost of certified checks can vary by region or country. In some areas, banks may charge higher fees due to local market conditions, while in others, the cost might be lower. It’s worth checking with your local bank to see what they charge.
Bank Account Type
Certain bank accounts, especially premium or business accounts, may offer free or discounted certified checks as part of their benefits. If you frequently need certified checks, it might be worth considering upgrading your account to take advantage of these savings.
How to Get a Certified Check
Step-by-Step Process
- Visit your bank: Go to the bank where you have your checking account, either in person or through their online service if they offer certified checks digitally.
- Request certification: Ask the bank to certify one of your checks. This process confirms that the funds are available and holds the money in your account for the check.
- Provide necessary details: You’ll need to give the bank the check, along with any required identification like a government-issued ID.
Required Information
To get a certified check, you’ll need:
- The payee’s name (the person or business the check is made out to).
- The exact amount of the check.
- A valid form of ID to verify your identity, if required.
Timeline
Getting a certified check is usually a quick process, especially if done in person. It typically takes only a few minutes once you’re at the bank, though online requests might take a bit longer. In most cases, you can get your certified check the same day.
Alternatives to Certified Checks
Cashier’s Check
A cashier’s check is similar to a certified check but is handled differently. With a cashier’s check, the bank takes the money from your account and issues the check from the bank’s own funds, making it just as secure.
This method ensures the payment will go through since the money is already withdrawn from your account. Cashier’s checks are often used for large transactions, like buying a car or home, and usually have similar fees to certified checks.
Money Orders
Money orders are a cheaper alternative for smaller payments. Unlike certified and cashier’s checks, money orders are limited to smaller amounts, usually up to $1,000.
They can be purchased at various places like post offices, convenience stores, and some banks. The cost is typically low, around $1 to $5, making them ideal for small transactions when a secure payment is needed.
Wire Transfers
Wire transfers are another option for large transactions. Unlike checks, wire transfers send money electronically between banks, offering a faster and more direct way to transfer funds.
However, they tend to be more expensive than certified checks, with fees often ranging from $20 to $50. Wire transfers are commonly used for international payments or for immediate payment.
When is a Certified Check Necessary?
Legal Requirements
Certified checks are often required for certain legal and financial transactions. For example, in home purchases, the seller may require a certified check to ensure that the funds are available and the transaction goes smoothly.
Similarly, loan repayments and large business transactions may also require certified checks to guarantee the payment. In these situations, using a certified check helps avoid any delays or issues that might arise with other forms of payment.
Security Concerns
A certified check offers more security compared to personal checks or cash. Since the bank verifies the funds and holds the money in your account, the person receiving the check knows that the payment is guaranteed.
This makes certified checks safer for high-value transactions, such as buying a car, paying for legal settlements, or making large down payments, as it reduces the risk of bounced checks or fraud.
Can You Avoid Certified Check Fees?
Premium Bank Accounts
Some banks offer premium accounts that waive fees for certified checks. If you have a high-tier checking or savings account, you may be eligible for free or reduced-cost certified checks as part of your account benefits. It’s worth checking with your bank to see if this option is available.
Negotiating with the Bank
If you’re a long-time customer, consider negotiating with your bank. Explain your situation and ask if they can waive the fee for certified checks, especially if you have a good banking history with them. Banks often appreciate loyal customers and may be willing to make exceptions.
Using Alternatives
If you want to avoid certified check fees altogether, consider using alternative payment methods. Money orders are a low-cost option for smaller amounts, and wire transfers can be a secure way to send larger sums, though they may have their own fees.
Additionally, cash payments or digital payment apps can be alternatives for secure transactions without the associated costs of certified checks.
Conclusion
In summary, certified checks serve as a secure and reliable method for making payments, especially for significant transactions like real estate deals or loan repayments.
While the average cost of obtaining a certified check typically ranges from $5 to $15, various factors can influence this fee, including the type of financial institution, your relationship with the bank, and your account type.
Understanding when a certified check is necessary and how it compares to alternatives like cashier’s checks, money orders, and wire transfers can help you choose the best payment method for your needs.
Additionally, exploring options to avoid fees, such as utilizing premium bank accounts or negotiating with your bank, can save you money.
Whether you need a certified check for a major purchase or are considering alternatives, being informed about the costs and options available will help you make better financial decisions.
FAQs
1. What is a certified check?
A certified check is a type of payment that your bank guarantees by confirming that you have sufficient funds in your account to cover the amount. The bank verifies the funds and holds the money, ensuring that the check will not bounce.
2. How much does a certified check cost?
The cost of a certified check typically ranges from $5 to $15, depending on the bank. Some financial institutions may charge more or less, so it’s essential to check with your bank for their specific fees.
3. When do I need a certified check?
Certified checks are often required for significant transactions, such as home purchases, loan repayments, or large business deals, where the seller or service provider wants assurance that the funds are guaranteed.
4. How can I get a certified check?
To obtain a certified check, visit your bank, request certification for a personal check, and provide the necessary details, such as the payee’s name and the amount. You may need to show identification.
5. Are there alternatives to certified checks?
Yes, alternatives include cashier’s checks, money orders, and wire transfers. Each has its advantages and costs, so it’s important to consider your specific needs when choosing a payment method.