Certified cheques are those that are certified by the bank that issues the same. It is usually a regular cheque that is written in advance and bank verifies the same by stamping it to indicate that funds are available for the transaction.
- Why we Need a Certified Cheque?
In certain cases cheques, we issue or receive do not clear when they are submitted to a bank for clearance. There could be reasons like details missing or inadequate funds. To avoid such problems a certified cheque can be issued. In this case, the bank that issues the cheque stamps it to indicate that funds are available. This also leads to the bank setting aside that amount which cannot be used or withdrawn except for that specific purpose.
- Getting a Certified Cheque
This kind of cheque is like any ordinary cheque. Someone who wishes to issue a certified cheque to another party needs to start by filling it out the same way they would any other cheque. Once the cheque is filled in the teller is asked to certify the same. Teller, in turn, will verify that the amount mentioned on the cheque is present in your bank account. Accordingly, that amount is put on hold as per instructions uploaded in the bank system. The cheque is then stamped which indicates that it is certified. Hence, the guarantee is on the bank to provide that amount to the recipient who is mentioned on the cheque payee name. In order to obtain a certified cheque, the person should hold a checking account. In case this is not present, one can get a cashier’s cheque. The amount you can mention on the cheque can be any without any limits specified, as long as funds are present in your checking account.
- Costs Involved
There are usually fees attached to most bank transactions. It could be an overdraft or ATM fees. Usually, banks also charge a nominal fee for customers seeking a certified cheque. This could be of amount $8 to $15. The fee is waived if you are a premium account holder or have a specialized account with a bank. In certain banks, as per policies, the charges are waived off. If you wish to know whether charges apply for a particular bank you can check their terms and conditions.
- In Case the Certified Cheque is Lost
It is best that you preserve a certified cheque carefully since these are usually for transactions to be made in the future that is vetted by the bank. Also, if the cheque is lost, it would be difficult for the bank to issue a replacement cheque since it means that the same money amount is being certified by the bank again, thus doubling the amount. Also, one might need to get hold of an indemnity bond if a certified cheque needs to be issued again. At the same time, the bank might also ask the person to wait thirty or ninety days for issuing a replacement cheque over which they will have no liability since they have already taken liability for the first one.