Certified cheques protect the buyer against a cheque bouncing personal cheques do not come with the guarantee that they will clear.Banks charge a fee for each certified cheque personal cheques are usually paid for in batches.A certified cheque is signed by the bank and the account holder a personal cheque is only signed by the account holder.A certified cheque is guaranteed funds a personal cheque is not.In a nutshell, the differences between a certified cheque and a personal cheque are: The main difference is that a bank guarantees that a certified cheque will clear, while it does not guarantee that a personal cheque will.Ĭertified cheques must be filled out in person at banks or credit unions, while a personal cheque can be issued from any place that it can be written. What is the Difference Between a Certified Cheque and a Personal Cheque?Īs we touched upon earlier, a certified cheque and a traditional cheque are not the same. You would have to transfer funds from your personal account into the bank’s account in order to get a cashier’s cheque. A cashier’s cheque, on the other hand, is drawn against the bank’s funds instead of the funds of your own personal bank account. While a certified cheque simply places a hold on funds, a money order involves the prepayment of funds that are then available to the payee on demand. You can order a certified cheque from any bank branch or credit union branch - it doesn’t have to be your home branch (the branch you opened your bank account at).Ī certified cheque should not be confused with a cashier’s check (or cashier’s cheque) or money order. Call the bank before arriving if you do not want to be taken aback by any surprise charges, but the cost is usually around $10 to $20. Most banks charge a nominal fee for issuing a certified cheque.
You will need to provide proof to the bank that you are the account holder, usually in the form of your debit card PIN, and a piece of government-issued ID. Once your issuing bank or credit union has verified that you have sufficient funds, they will be able to issue the certified cheque to you. To get a certified cheque, you will need to visit your bank or credit union in person. Personal cheques come with their associated costs, and for many individuals who only use a handful of cheques per year, it’s just not worth it.Īlthough certified cheques do cost money, it’s still more economical than ordering a book of cheques if you are planning on doing minimal banking in this way. A certified cheque is just as valuable as sending cash, just without the risk of losing paper money.Īnother advantage of a certified cheque is that it provides an option for those who do not own personal cheques. For example, large transactions cannot usually be completed over e-transfer, and they certainly can’t always be completed with cash. This protects them from the possibility of a cheque bouncing.Ī certified cheque may also be used in an instance where another payment type is not available. When dealing with large transactions (say, over $1,000), a payee may request a certified cheque as payment. The bank teller who assists you will also sign off on the cheque themself - this is where the literal process of “certifying” the cheque happens.Ĭertified cheques are most often used for large purchases. In order to signify that a cheque has been certified, a bank will usually add a signature or stamp. When you order a certified cheque, your bank will often, but not always (check with your bank), freeze the allocated funds in your account so that you do not accidentally spend them.
The payee can, in turn, be sure that they will not be left paying a pesky bank fee for trying to cash a bad cheque. The clear benefit of a certified cheque is that it cancels out the possibility of a cheque bouncing, which means guaranteed payment for the payee. This means that the bank has looked at the cheque issuer’s account and certified that the promised funds exist. Unlike a normal cheque, which is written by a bank account holder as a promise of the existence of funds within a bank account, a certified cheque (certified check in US English) has been verified by a financial institution. What is a Certified Cheque and How Do They Work?īefore we begin, let’s get one thing out of the way: this article is not about the regular cheques that you would find in your checkbook.
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