A certified check is a form of payment guaranteed by the individual's banking institution as being valid. A certified check is issued by a banking establishment indicating the payee's name along with the signature of the individual submitting the certified check. Banking establishments will then make sure that the amount of money covered by the check is untouchable in the bank account, save by the certified check being cashed.

In most instances, a certified check is utilized when the payee does not know or trust the credit of the borrower. Payees can rest assured there is no way to cancel a certified check or otherwise void it once it has been submitted, making it a reliable and secure form of payment that's just as good as cash. While some banks will offer a certified check without a fee for services rendered, others will charge a service fee. There are a number of business-based certified check applications and uses to consider, including:

1. Paying online vendors for purchases.

2. Receiving payment from clients for purchases.

3. Ensuring the legitimacy of any certified check you may receive.

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Make payments for business items utilizing a certified check

There is no way for a certified check to bounce or be voided. As a result, they can help ensure that purchases are completed in one of the fastest and most efficient manners possible. No delay will occur on account of insufficient funds or other financial hold ups. The payment of purchases is one of the primary certified check applications and uses.

I recommend: JRank.org discusses how an individual or entity may get certified checks. It also discusses the liability of banks to pay valid certified checks upon receipt. SuperPages.com also discusses the process of getting a certified check from a banking establishment in order to make purchases with the funds.

Accept a certified check from clients who make purchases from your business

Since a certified check is as good as cash, businesses can rely on them. By accepting a certified check from a client, businesses are guaranteed the money owed to them. If your business has any qualms about receiving payment from an individual or alternate business, ask for payment in the form of a certified check.

I recommend: CSMC.edu offers detailed information on where to cash a certified check, namely at one's local bank, as well as additional information on certified checks. Commerce Journal discusses the expiration date on cashing a certified check and the requirements for cashing a certified check, important aspects for businesses to consider when trying to adhere to certified check applications and uses.

Secure certified check applications and uses by confirming the validity of said certified check

It is important, in the interest of confirming potential certified check applications and uses, to validate any certified checks issued to your business. Due to the fact that certified checks are as good as cash, there are some unscrupulous characters who will forge certified checks. Businesses need to be aware of how to validate such checks in order to protect the business from a financial standpoint.

I recommend: BankRate.com discusses why businesses and individuals cannot always trust a certified check. The site discusses federal laws governing certified checks and certified check applications and uses, while also describing the increase in activity counterfeiting certified checks. Meanwhile, eHow.com discusses how to avoid certified check scams, offering such information as understanding banking laws in the matter and being wary of certified checks written out for more than the owed amount.

A certified check is a good form of payment for conducting various business transactions including purchasing, leasing or selling real estate, and purchasing stocks and bonds. A certified check is considered “certified” when a bank officer verifies that funds are available to cover the check amount and notes the check as such. Certified checks are available from a variety of banking institutions.

Banks draft certified check funds from your account immediately to cover the amount of the certified check. Once the certified check information is verified and confirmed by the bank, the bank becomes responsible for payment of the check. You can obtain additional certified check information from your local banking institution. Consider the following to determine if a certified check is beneficial for your transaction:

1. A certified check bank guarantee is as reliable to cash payment.

2. A certified check is a wise choice for large transactions.

3. Any banking institution offers certified check advice.

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Increase payment security with a certified check

While a certified check is useful to business owners in conducting business transactions, they are also useful as forms of payments from customers for high-priced goods or real estate property sales and leases. Because funds from a certified check are verified, you have more payment security than when accepting a standard personal check. While banks are under no obligation to issue certified checks, they are required by law to pay out funds for any checks that they have verified unless a fraud has been discovered.

I recommend: Killbuck Bank will issue certified checks for $10. The fee is waived for customers over the age of 60. State Bank of Arcadia offers a range of convenience services including issuance of certified checks.

Request a certified check

A certified check is generally issued to anyone who requests one and has sufficient funds to cover the check. In most cases, this form of payment is better than cash because it is traceable. To obtain a certified check, you must go to your bank so that funds can be verified. Banks will generally charge a small fee to issue a certified check.

I recommend: United Fidelity Bank issues certified checks and charges a $25 fee. GCF Bank makes funds from a certified check available on the next business day following your deposit.

Cash a certified check

If you are receiving a certified check, it can be deposited into your account even if it is not drawn off of your same bank. You can also, in some situations, cash certified checks at the bank from which it is drawn even if you are not an account holder with that specific bank.

I recommend: Norbel Credit Union charges $3 to cash a certified check made payable to a third party. If the check is made payable to a Norbel account holder, than the fee is waived. Cash Cards International is an Internet-based institution that will process a certified check for an additional $10 fee.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Although certified checks are more secure than personal checks, counterfeiting can still occur. Be leery of the certified check location of origination and inquire about the funding institution if the name of the bank does not sound familiar. Proceed with caution and do not rely on any funds from a certified check until the funds actually clear your bank.

A certified check is guaranteed by a bank and essentially proves to the payee that you have enough funds in your account to cover the transaction. Certified checks are common when large down payments are required — for buying a car or a house, or when putting down a security deposit on a rental property. To get a certified check you must go to your bank and have a teller prepare it for you. Your bank then sets the money aside to ensure the check does not bounce.

Many banks charge a fee for certified check services, although some will provide it for free as a perk to its customers. If the fee is a deal breaker for you, compare certified check pricing and costs at different banks. Look at the following types of institutions to evaluate their fees for certified check services:

1. Review the websites of large institutional banks to see how much they charge for certified check services.

2. Consider the costs of certified check preparation at smaller, local banks.

3. Check out credit unions to see if they will offer customers a break on cashier check services.

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Review the fees charged by large banks for certified check services

Large institutional banks charge less than $10 for certified check services. Check with the bank before opening an account to see if the fee may be waived based on the type of bank account you have.

I recommend: Citibank refers to certified checks as "counter" checks and charges $5 per check to all but its Citigold Account customers, for which the fee is waived. The cost for check-related services varies according to Bank of America's fee schedule, but user forums indicate the cost is approximately $8.

Compare the cost of obtaining a certified check at smaller or local banks

Smaller, local banks appear to be competitive with the larger banks, charging approximately $10 per check. Similar to larger banks, it is not uncommon for them to offer discounts in the fees, so be sure to see if you are eligible.

I recommend: United Bank, a smaller bank with branches in Massachusetts, charges $10 for certified check services. The Killbuck Savings Bank, with several branches in Ohio, also charges $10, but will waive the fee for customers over the age of 60.

See if credit unions will discount certified check fees

Credit unions seem to offer the best deal on certified checks. Most offer their members discounts on many services. Shop around for a credit union and see if you can qualify as a member. It may save you some money on a variety of fees down the road.

I recommend: Denver-based Sooper Credit Union offers discounted fees to its members for certified checks -- with members paying $2 and non-members paying $10. The Duval Federal Credit Union in Jacksonville, FL. charges $5 for certified check services.

A certified check is one that the bank has guaranteed to pay. Banks usually issue certified checks only after the amount of the check has been reviewed and it is set aside for the specific pay out. Certified checks are good for both payees and recipients as a way to guarantee funds are immediately available.

As a business owner, it's important to understand the terms associated with certified checks so you know what you're getting into when accepting or issuing a bank certified check.

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Counterfeit

Even though a certified check is one of the most secure ways to accept large amounts of money in a transaction, it can still be counterfeit. Counterfeit means the check is a fraud or forgery and unreal.

I recommend: The City of Barnwell Police Department defines counterfeit with regards to checks.

Authenticated

Authenticated means the check is certified by the bank and funds are available to cover the amount of the check. Certified checks are considered authenticated and become the bank's responsibility to pay when they issue them.

I recommend: The term authenticated is described in the Killbuck Savings Bank Co. description of certified checks.

Availability

Availability is the simple term meaning the ability to be accessible. When used to describe a certified check, the term availability refers to the obtainability of the funds issued in a check. Some banks have delay policies to make sure the check is legitimate before cashing it.

I recommend: The term availability is defined at the GCF Bank website.

Check guarantee

A certified check can have a guarantee, or pledge, that the check will be cashed without problem. This is sometimes referred to as a check guarantee. Merchants who accept certified checks may want to look for the guarantee information before accepting the payment.

I recommend: The check cashing process is explained in detail, including the term check guarantee at Info Merchant.

Certified

Certified is defined as an object, in this case a check, that is guaranteed by its issuers.

I recommend: The American Law and Legal Library defines the term "certified" and explains how a certified check works.

Sufficient and non-sufficient

Sufficient is a term used to describe the amount of something being enough. In banking terms, a sufficient fund check is one that is written within the amount of money available to pay, while a non-sufficient fund check is one that lacks enough money to cover the written amount.

I recommend: E-Personalfinanc.com defines sufficient and non-sufficient.