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What's the difference between a cashier's check and a certified check?
by Mary Beth Guard, BOL Guru

QUESTION: I understand that a Certified Check is written on funds deposited in an account and the bank guarantees those funds for the check. A cashier's check is purchased with funds provided by the customer and the bank issues a cashier's check that is guaranteed by those funds. Am I correct or not?

ANSWER: Article 3 of the Uniform Commercial Code defines a "certified check" under 3-409 as "a check accepted by the bank on which it is drawn. Acceptance may be made as stated in subsection (a) or by a writing on the check which indicates that the check is certified. The drawee of a check has no obligation to certify the check, and refusal to certify is not dishonor of the check."

You are correct that a certified check is one drawn on a customer's account on which the bank has noted its certification.

A cashier's check is a direct bank obligation -- a check drawn by the bank on an account maintained at the same institution. It is defined under UCC 3-104(g) as "a draft with respect to which the drawer and drawee are the same bank or branches of the same bank."

First published on 3/4/02

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