How Do Banks Handle Certified Cheques?

Learn how banks secure certified cheques and ensure they won't bounce, providing safety for your transactions.

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Banks typically secure a certified cheque by holding the amount in the issuer's account. This guarantees the cheque will not bounce, adding security for the payee. For precise policies, contact your bank directly.

FAQs & Answers

  1. What is a certified cheque? A certified cheque is a personal cheque that a bank guarantees, ensuring that the funds are available and the cheque will not bounce.
  2. How does a bank certify a cheque? A bank certifies a cheque by verifying that the funds are available in the issuer's account and then marking the cheque as certified.
  3. Is a certified cheque the same as a money order? No, a certified cheque is a personal cheque backed by the bank, while a money order is a prepaid instrument usually purchased at a retailer or bank.
  4. What should I do if a certified cheque is returned? If a certified cheque is returned, contact your bank immediately to understand the reason and recourse options, as the bank guarantees the funds.

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