A cashier’s check is not something the vast majority of us use on a regular basis. After all, who wants to bother going into a bank and dealing with that when you can just write a personal check or hit the ATM on the way to wherever it is you are going? I say that, but I haven’t actually been in the drive-thru or lobby of a bank in 14 years considering I am married to a banker and he does all the dirty work for me at some point when he gets a few minutes to step out of his office during the day. However, I know that it’s a little more involved and takes actual effort to get a cashier’s check. And even though I know you don’t want to bother with it, but there are a few instances in life when using a cashier’s check is a good idea.
For those who aren’t even sure what one is (don’t feel bad about that, either) it’s a check that the bank draws, guaranteed by their funds. There are instances in life in which you will need one of these or you will not be able to pay for something. For instance, when I was pregnant with our first daughter 8 years ago, I bought myself a brand new Lincoln SUV and I placed a large down payment on it. The dealership gave me two options; write a personal check and wait for the check to clear to pick up the car or go to the bank and get a cashier’s check and I could take it home right away. That’s what I’m talking about (I’ve since learned that brand new cars are a total waste of money…depreciation!…and that buying slightly used is much wiser). When you have to have guaranteed funds, a cashier’s check is the way to go. Additionally, sometimes it is a good option for other reasons, as well.
Before I tell you when you’re going to need a cashier’s check, I’ll tell you how to get one. Go to the bank in which you have your bank accounts. See the teller; ask him or her for a cashier’s check. The teller will then remove – or freeze – the funds from your account in the amount of the check that is being drawn. You no longer own those funds. Those funds are now the bank’s funds, and that check now belongs to the person or company whose name is on the front. When that check is cashed, the bank will pay it – no questions asked. Your bank might issue these checks free of charge depending on the type of accounts you have with them, but be aware that there might be a small fee associated with purchasing a cashier’s check; and here’s when you might need it.
When purchasing a home in cash
If you are purchasing a home using cash, you’re not writing a personal check for hundreds of thousands of dollars. Additionally, you are not going to your closing with that much cash in your hand. You will be required to bring with you a cashier’s check so that you can pay for your home and the bank can guarantee the funds.
When putting a down payment on a house
Down payments are very expensive, and you have to be able to guarantee the funds. When my husband and I purchased our home last year, we placed a down payment on our home and had to do that with a cashier’s check. He brought the check to closing so that we could get the keys to our house and begin moving in.
When putting a down payment on a car
Like I mentioned above, many dealerships will take a personal check or credit card in lieu of a cashier’s check for a down payment, but when you’re making a five figure down payment on a vehicle, you might have to have a cashier’s check on hand to do it.
When buying a car outright
You could walk into a car dealership with $50,000 in cash in your wallet, but it won’t fit. So that leaves you vulnerable and feeling a bit unsafe. Who walks around with that much cash? Instead, a cashier’s check is going to make your job feel a lot less stressful, and then you don’t have to wait while the dealership counts your cash – and you have a paper trail of payment.
When paying off a loan
It’s just a good idea so that you can have the money guaranteed, and have it processed as quickly as possible. We do pay off all loans – especially if they’re early payoffs – with cashier’s checks. It’s something my husband insists on.
When paying the IRS
Every year when I send my check to the IRS after filing our taxes, I do so with a cashier’s check. It’s safer, it’s easier and it’s just one of those things that my banker husband thinks is correct. And my accountant recommends it, too, so when they so day it, I do it.
When paying an attorney
If you require the services of an attorney, you might find that they will not accept payment or begin work until you have a cashier’s check in hand. This is because their line of work requires this of them and requires that they have funds up front before beginning their work.
When moving money to an investment account
Anytime you move money to an investment account, it’s just good practice to do this with a cashier’s check. In fact, you’ll find that many investors require this upfront before they will do anything with you.
To pay off a debt
If you owe a debt and you’re paying a large amount to pay it off, it’s just safer and easier to do this with a cashier’s check. This is especially true if you do not want a debtor to have all your personal banking information sitting on your check.
To pay your property taxes
When we pay our property taxes in November, we will do so with a cashier’s check. My husband insists on this, stating that it is the best way to make those payments, and I agree with him. I have no other reason other than that the payment is large and he prefers to use one.
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