What is a Cashiers Check?
In business it is often the case that a supplier will demand payment before supplying goods. One method of dealing with this is for the business to ask its bank for a cashiers check.
The bank will charge the customers account with the amount and then provide the cashiers check drawn on the bank’s own funds and signed by a cashier.
As the bank has assumed responsibility for the amount, the cashier’s check is in effect guaranteed payment.
A cashier’s check is sometimes referred to using any of the following names:
- Cashier’s cheque
- Banker’s cheque
- Bank cheque
- Banker’s draft
- Treasurer’s cheque
- Official cheque
- Demand draft
- Teller’s cheque
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.