Earning

There's More Than 1 Kind of Check—Here Are 5 More You Might Need

How to fill out a personal check” is one of the most-Googled money questions—likely because we make so many payments online now. Overall usage of checks drops by 3% each year, estimates the Federal Reserve.

To complicate matters, there are various types of checks beyond the paper kind collecting dust in your desk drawer. You may not encounter them often, but knowing about them can help you protect yourself when you’re buying a home, for example, or selling your old car.

“Different checks are used as the dollar amount increases and the level of trust between two people is less certain,” explains Steve Kenneally, senior vice president of payments at the American Bankers Association. “If you are buying a car from someone you’ve never met, chances are they won’t take a personal check from you.”

Here’s what you need to know about five types of checks beyond personal checks and when you might encounter them.

1. Cashier’s, Bank, or Official Check

This secure payment used to make significant purchases might be called a cashier’s check, bank check, or official check, depending on the financial institution. It requires a teller to withdraw funds from your personal account and cut a check from the bank to pay the receiver on your behalf, says Kenneally. The bank is guaranteeing payment.

It's less risky than a personal check. When you use a personal check, the money comes directly from your account, so if it turns out you don’t actually have enough funds to cover what you owe, the recipient could be out of luck. A cashier’s check, on the other hand, won’t bounce.

Usually it isn’t free, either. Fees can vary depending on which bank you use, what kind of account you have, and the size of the check. TD Bank, for example, charges $8 for an official check.

2. Certified Check

A certified check is a type of personal check that the bank guarantees. At the time you write the check, the bank verifies you have enough money in your account to cover it—and may place a hold on those funds until the check clears. The check typically has “certified” stamped or printed on it. Fees vary depending on which bank you use and the size of the check.

More from Grow:

3. Money order

Money orders are prepaid paper certificates that function like a check: The listed recipient can deposit or cash them.

One big advantage of money orders is that you can buy them at lots of different places, including post offices and grocery stores as well as banks and credit unions. That convenience makes them a good option for people who don’t use bank accounts, or who don’t have access to a nearby branch of their preferred bank. Money orders are guaranteed—you’re handing over cash for the clerk to process—and they never expire, Kenneally says.

Issuers cap money orders, often at $1,000, so you may need to purchase several to cover a large transaction. Fees can vary, too. USPS, for example, has fees from $1.25 to $1.70, depending on how much money you’re handling.

4. Electronic check

An electronic check, or e-check, is a digital version of a paper personal check issued through your bank. You can often set up automatic payments using e-checks so you don’t have to remember to write out paper checks for recurring bills like your rent or mortgage.

5. Giant check

While they look good in pictures, those giant checks you see lottery and contest winners holding are just props. You can’t cash them. Lottery winners typically receive their actual money through wire transfers, says attorney Jason Kurland, a partner at New York-based law firm Rivkin Radler who’s also known as the Lottery Lawyer.

“You can walk around with a big check, but [a bank] will not deposit it,” he says. “They would freak out.”

Check out 3 Things Experts Say to Do if You Win the Lottery

acorns+cnbcacorns cnbc

Join Acorns

GET STARTED

About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.