What happens if you lose a cashier’s check?

SmartAsset: lost cashier’s check

A cashier’s check is a type of official check drawn on the bank’s funds, rather than your own. You can get a cashier’s check if you need to pay something and you can’t or don’t want to use another payment method. But what if you lose a cashier’s check? Are you short of money? A lost cashier’s check can be a headache, but there are steps you can take to get those funds back. If you’re looking for help with all of your financial needs, consider working with a financial advisor who can help you navigate your unique situations.

How does a bank check work?

When you write a personal check, the person or entity to whom you write the check can then deposit or cash it. The amount of the check is debited from your bank account. Cashier’s checks, on the other hand, work a little differently. When you buy a cashier’s check from your bank, the bank deducts the money from your account and uses it to fund the check. But instead of withdrawing the check from your account, the bank issues the check from its own account.

The use of a cashier’s check may be preferable or necessary in situations where large sums change hands. For example, you can use a cashier’s check to pay if you buy a car. Or you can use a cashier’s check to cover the down payment and closing costs of a home you’re buying.

Cashier’s checks are an attractive form of payment because they are essentially guaranteed funds. The bank took money from your account to cover the check. As such, the person or entity receiving the check has the assurance that the cashier’s check will not bounce.

What happens to a lost bank check?

A cashier’s check is considered lost when it cannot be found. Banks may treat lost cashiers checks and stolen cashiers checks differently. If you buy a cashier’s check and lose it, there are a few possible solutions. The first thing you can do is report the lost check to the bank and request a stop payment.

A stop payment prevents the check from being cashed. The issuing bank may authorize a stop payment on a cashier’s check if you can demonstrate that a lost cashier’s check was in fact stolen or that there was some type of fraud involved in the transaction. However, you have to wait 90 days or more before you can request a stop payment, which could still give someone time to cash a lost cashier’s check.

Your bank may require you to file a statement of loss for the cashier’s check. Essentially, you will have to declare that you lost the check and have no hope of getting it back. Filing this statement allows you to make a claim for lost funds. But again, you may be subject to a 90 day waiting period before the money can be returned to you.

What if you lose a cashier’s check someone else gave you? You sell your car, for example, and the buyer gives you a cashier’s check to cover the amount, but you misplace it.

In this case, you can try asking the person who gave you the check to replace it. However, they are not obligated to do so if a lost check is the result of your own actions. If the person who gave you the check is unwilling to replace the check for you, the next step is to get a surety bond.

What is a Lost Cashier’s Check Bond?

SmartAsset: lost cashier's check

SmartAsset: lost cashier’s check

A surety bond is a type of bond that creates a binding agreement between two parties. The principal of an indemnity bond is the entity that has financial responsibility to the second party, known as the obligee.

If you lose a cashier’s check that you bought or someone else gave you, the issuing bank may ask you to buy a surety bond to replace it. The surety bond effectively protects the bank against any monetary loss if someone finds the lost cashier’s check and cashes it after having already replaced it for you.

Bonds are sold through insurance and surety companies. You will need to apply for a bond and you may need to accept a credit check and background check. If the bond is approved, you will need to pay a premium of between 1% and 5% of the amount of the bond for it to be issued.

Keep in mind that it may still take a while for a lost cashier’s check to be returned to you, even if you take the extra step of getting a bond. It can take 30 to 90 days, or even longer in some cases, for the bank to replace a lost cashier’s check once the bond has been issued.

Can you void an unused cashier’s check?

You may buy a cashier’s check only to find out later that you no longer need it. In this case, the check itself isn’t lost, but you may be wondering if the money you used to buy it is gone for good.

In this case, you can contact the bank to find out what you can do to have the cashier’s check money deposited into your bank account. You may need to deliver the check to the bank in person before the bank agrees to return the funds.

Keep in mind that the bank may not refund the fees you paid to buy a cashier’s check. Depending on the bank, this may only be a few dollars, but at some financial institutions the cashier’s check fee may be $30 or more.

The essential

SmartAsset: lost cashier's check

SmartAsset: lost cashier’s check

When it comes to cashier’s checks, it’s important to know when they are an appropriate choice for payment. Although cashier’s checks are a safe and secure method of payment, they can create unnecessary headaches if you end up losing one. Knowing what to do in the event of a lost cashier’s check can help you minimize your financial losses. Your options almost always involve contacting a bank to void the cashier’s check. Keep in mind that the bank is not likely to refund the fees paid to create the original cashier’s check.

Banking advice

  • Consider talking to your financial advisor about the implications of a lost bank check and how to handle large financial transactions. Wire transfers, for example, can be a faster way to transfer money from your account to someone else’s, although they can sometimes come with high fees. If you don’t already have a financial advisor, finding one shouldn’t be difficult. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your corresponding advisors for free to decide which one is best for you. If you’re ready to find an advisor who can help you reach your financial goalsstart now.

  • A cashier’s check should not be confused with a certified check. A certified check is drawn on your funds but is certified by the bank. Similar to cashier’s checks, they can be a secure way to make payments using your funds instead of the bank’s. If you lose a certified check, the replacement process reflects the steps required to replace a lost bank check.

Photo credit: ©iStock.com/MStudioImages, ©iStock.com/AndreyPopov, ©iStock.com/JuiceBros

What to do with a lost bank check? appeared first on SmartAsset Blog.

About Joan Dow

Check Also

Want to see Taylor Swift on tour? You might need a Capital One credit card

Image source: Getty Images If you want to see Taylor Swift in 2023, you’ll need …