Cashier's check (cashier's cheque, banker's cheque, bank cheque, official cheque, teller's cheque,
banker's draft or treasurer's cheque) is a
check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier.
[1] Cashier's checks are treated as guaranteed funds because the bank, rather than the purchaser, is responsible for paying the amount. They are commonly required for real estate and brokerage transactions. A customer asks a bank for a cashier's check, the bank debits the amount from the customer's account immediately, and then the bank assumes the responsibility for covering the cashier's check
In the United States, under Article 3 of the
Uniform Commercial Code, a cashier's check is effective as a note of the issuing bank. Also, according to
Regulation CC (Reg CC) of the
Federal Reserve, cashier's checks are recognized as "guaranteed funds" and amounts under $5,000 are not subject to deposit hold, except in the case of new accounts. The length of a hold varies (2 days to 2 weeks) depending on the bank. It is not clear what length of time may pass before a bank can be held responsible for accepting a bad cashier's check.
