Canada doesn’t use cashier’s cheques – instead, Canadian banks offer bank drafts and certified cheques, which are guaranteed and certified by the bank like cashier’s cheques are in the U.S.
These are safe and secure payment options commonly used for large transactions such as vehicle purchases or down payments for real estate purchases. However, Canada’s alternatives to cashier’s cheques do come with a fee.
Below, we review the alternatives to a cashier’s cheque in Canada, including what your options are, how to get them, and the pros and cons.
Key Takeaways
- Canada’s version of cashier’s cheques are bank drafts or certified cheques.
- The funds are guaranteed by the bank, making this a very safe form of money transfer.
- Guaranteed funds are helpful for large purchases where both parties need extra security beyond personal cheques.
- There’s a fee for this service from most institutions.
What is a cashier’s cheque?
A cashier’s cheque is a secure payment guaranteed by a bank. It may also be referred to as an "official cheque."
This cheque is drawn from the bank’s funds and then signed by a bank official. Here are a few more details and features:
- Cannot be cancelled once issued
- Must be signed and sealed by a bank official
- Typically used for large transactions
- Tend to clear faster than personal cheques
These features make it more reliable than personal cheques which are directly from your account.
Note: Canada does not issue cashier’s cheques like those used in the U.S.
Instead of cashier’s cheques, Canadian banks offer bank drafts and certified cheques. While similar, they have important differences.
How to get a cashier’s cheque
You can get a cashier’s cheque from most banks and credit unions in Canada if you’re an account holder. Some institutions allow non-customers to purchase them for a fee.
Follow these steps to get a cashier's cheque:
- Visit your bank or credit union in person.
- Provide the cheque details (payee name and amount).
- Authorize the withdrawal from your chosen account.
- Pay the fee ($10–$20, depending on the institution and your account type).
Be aware that some banks may not offer official cheques drawn on personal accounts, due to the widespread popularity of Interac e-Transfers. Check your bank's website or call ahead to be sure.
Common scams with cashier’s cheques
While not as common as they used to be, scams with cashier’s cheques and bank drafts do occur. Stay alert for these common scams:
Overpayment scam: A fraudster sends you a counterfeit cheque that exceeds the payment amount and then asks for the excess to be returned via wire transfer or cash. However, once the cheque is identified as fake, you're liable for the entire amount.
How to avoid: Decline overpayment offers and wait for cheque clearance before issuing refunds.
Fake buyer scam: A scammer poses as a buyer for an item or vehicle you're selling and pays with a fraudulent bank draft. After you hand over the goods, the draft bounces and leaves you without payment.
How to avoid: Verify the authenticity of bank drafts for larger purchases with the issuing bank before completing transactions.
Advance-fee scam: A scammer may offer you a large sum of money in return for a smaller upfront payment via cashier’s cheque. The cheque will be counterfeit, leaving you out of pocket.
How to avoid: Avoid deals requiring advance payments for promised funds.
Bank employees are trained to detect fraudulent cheques. However, if you get defrauded, the chances of recovering funds after a scam are slim, especially if the cheque has already cleared. Report any fraud to the bank as quickly as possible to increase the likelihood of identifying the scammer.
Cashier’s cheque vs. cheque
The major difference between a cashier’s cheque vs. cheque is the source: A cashier’s cheque is issued by a bank using its own funds, whereas a personal cheque is drawn from an individual's account.
| Payment type | Source | Risk | Clearing time | Fee |
|---|---|---|---|---|
| Cashier's cheque | Bank’s own funds | Guaranteed by the bank | Faster processing | $10 to $20 |
| Personal cheque | Account holder’s funds | Could bounce with insufficient funds | Slower processing | No fee |
Pros and cons of cashier’s cheques
Here's a look at the main benefits and disadvantages of cashier's cheques:
| Pros | Cons |
|---|---|
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Alternatives to cashier’s cheques
The main alternatives to cashier’s cheques in Canada are bank drafts, money orders, certified cheques, and personal cheques. Each offers different levels of security, cost, and convenience, depending on your needs.
Bank drafts: These are Canada’s version of a cashier’s cheque.
- Issued by the bank (like cashier’s cheques)
- Typically used for larger transactions
- Safe and guaranteed
- Lower fee than cashier’s cheques
Money orders: Money orders are prepaid orders, typically made for small amounts.
- Prepaid by the buyer
- Secure payment option
- Lower maximum limit
- Available at banks and post offices
- Lower fee than cashier’s cheques
Certified cheques: A certified cheque is one that's drawn from your account but verified by the bank.
- Bank verifies the issuer’s balance to certify the cheque
- Typically used for larger transactions
- Payment is guaranteed
- Similar fee to cashier’s cheques
- Recovery is harder than with a bank draft
Personal cheques: Written by the account holder from a personal chequebook
- Funds not guaranteed, so less secure
- No fee to issue
- More common for smaller transactions
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What is a cashier’s cheque in Canada?
Cashier’s cheques do not exist in Canada. Instead, Canadian banks issue bank drafts or certified cheques. These are both guaranteed payments drawn from the bank’s or payer’s account (for a fee), ensuring the funds are available.
What is the difference between a teller check and a cashier’s check?
The term "teller cheque" is not commonly used in Canada. Instead, Canadians use a bank draft (issued and guaranteed by the bank) or a certified cheque (issued by an individual and guaranteed by the bank).
What is the maximum amount for a cashier’s check?
In Canada, there's no set maximum amount for a bank draft or certified cheque (we don't have cashier's cheques). However, large sums over $10,000 may require additional steps or approvals. Check online or call your bank for its policies.
Whose signature is on a cashier’s check?
For a bank draft in Canada (since Canadians don’t typically use cashier’s cheques), the bank signs the cheque to guarantee the funds. With a certified cheque, the account holder signs the cheque but the bank certifies it.
Is a cashier’s cheque safe?
Yes, this form of payment is very safe because it is backed by the bank’s guarantee. That’s why it’s commonly used for large transactions. However, like all payment methods, it can be subject to fraud if misused or falsified.
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