Most people are familiar with personal checks. However, the term cashier’s check may be a little less common to the normal consumer.

That begs the question – what exactly is a cashier’s check, and how exactly is one different than a personal check?

When you write a personal check, funds are drawn straight from your own bank account when the recipient cashes the check. But with cashier’s checks, also known as bank checks, funds are drawn directly from the bank itself and the bank guarantees the funds for the check, not the individual person. While the bank assumes the responsibility for covering the check, the bank will take the money out of the customer’s account immediately or utilize the cash provided to cover the funds. A cashier’s check usually clears the next business day.

Below are a few common questions regarding cashier’s checks and how they differ from personal checks.

Why use cashier’s checks?

Cashier’s checks are normally used for larger purchases – such as automobiles, rent or even buying a home. The recipient prefers cashier’s checks in these cases as the money is guaranteed.

How do you get a cashier’s check?

The first step when it comes to getting a cashier’s check is to either order one online, or visit your bank’s branch and request one from the teller. The teller will have to sign the check in order for it to be valid. Have the exact amount of money you want for the check and the recipient’s name ready in order for things to go as smoothly as possible.

What are the fees for bank checks?

Cashier’s checks are certainly convenient for both the payer and the recipient. However, the bank isn’t going to just make its funds available without receiving something in return.

Banks do charge a fee for signing a cashier’s check, usually around $10. This list gives the fee amounts that various banks charge in 2018.