Cashier’s Check – Definition

Cite this article as:"Cashier’s Check – Definition," in The Business Professor, updated December 17, 2018, last accessed October 26, 2020,


Cashier’s Check Defined

A cashier’s check, or money order, offers a secure way to transfer funds. It works like a normal check but offers an additional guarantee that the check will be honored (the payor bank will pay the value of the check). It reduces the risk of the payor’s default (lack of adequate funds to pay the check).

A Little More on How a Cashier’s Check Works

Instead of issuing a check from your personal checkbook, the party sending the money has to talk to your bank to get a cashier’s check. The party must have adequate funds to cover the cashiers check in her bank account. The bank will draw a check paid to the recipient. The recipient can cash or deposit the check in any bank, as it is secured by the issuing bank.

A cashier’s check has numerous advantages over a personal check. It will not bounce. The payer cannot cancel the check or withdraw the funds before the check is paid. This reduction in risk makes the cashier’s check a valuable tool in business transactions.

References for Cashier’s Check

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