A Check/Cheque issued by a Bank upon the received funds of a payer.

Regular checks work with you (the payer) writing a promissory note (a check) that you give to the payee. This note guarantees to the payee that they may then redeem this note at a Bank whereupon the actual monies will be deducted from your account and given to the payee.

The problem here is that anyone can write a check, regardless of how much money is actually in their Checking Account. So the check someone has written you may well not be worth the paper it's written on. As well, even though there may have been sufficient money in the payers checking account when the check was written, there might not be when you finally get around to cashing the check a number of days later.

To get around this, as well as using a Money Order, you can use a Cashier's Check (also called a Bank Draft, Certified Check, Teller's Check, Counter Check. Banker's Cheque or Verified Check).

What you have here is "Pay before Play" scheme where money is surrendered when the check is issued (most likely by a Bank or Credit Union). Instead of the check drawing upon the payers Checking account, the payer gives the money to the Bank and they issue the check in their (the Banks) name, and a good bank will usually then hold that money especially to cover that particular check. In this way the check is virtually guaranteed to have solid monetary backing.

They are not very convenient for use "on the go", as you have to go to a Bank to get one, but they are very useful when paying for goods or services through the mail/post.

Note: Check and Cheque can be used interchangeably in these contexts, but I use check in deference to those who are in the USA or similarly disadvantaged.

Cash*ier's" check (?). (Banking)

A check drawn by a bank upon its own funds, signed by the cashier.

 

© Webster 1913.

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