A certified cheque is a personal cheque that’s been authorized with an official stamp by your bank. It shows that you have enough funds in your account to cover a payment – essentially guaranteeing payment for the recipient.
While similar to a bank draft, a certified cheque doesn’t withdraw funds from your account until the cheque is deposited. When you purchase a bank draft, funds are immediately moved into a holding account.
A certified cheque is required in unique situations where writing a personal cheque just won't cut it, such as buying a used vehicle or making a down payment.
Key Takeaways
- A certified cheque is a personal cheque that's been verified by a bank, therefore guaranteeing the funds are available.
- You can only get a certified cheque by going into a bank and receiving help from a bank employee.
- Each bank has its own fees for certified cheques, ranging from $10 to $25.
- Popular alternatives include bank drafts, Interac e-Transfers, and wire transfers.
- Certified cheques are used to make large purchases, such as a used vehicle.
What is a certified cheque?
A certified cheque is a bank-issued check where the bank verifies and guarantees that there are sufficient funds available to cover the amount of the check.
How to use a certified cheque
A certified cheque provides security and peace of mind for large purchases where the seller and buyer don’t know each other.
Here are a few examples of purchases that might require the use of a certified cheque:
- Making a down payment on a house or property
- Paying the damage deposit for a rental property
- Buying a used car
- Making payments to collections agencies
To get a certified cheque, follow the steps below and then give your cheque to the buyer as payment.
To cash a certified cheque, deposit it at your financial institution. It may take a few days for the funds to arrive in your account.
How to get a certified cheque
To get a certified cheque, you'll need to go into a bank branch and proceed with a few steps:
- Confirm the information: Say to the teller that you'd like to get a certified cheque. They'll ask how much you'd like the cheque made out for and confirm that you have enough money in your account to cover it.
- Verify your identity: The teller will then ask you for ID to verify your identity and signature.
- Understand the details: They'll take the time to explain any conditions attached to the certified cheque. This can include details like how long it's valid for, when the funds will be available, etc.
- Fill out the cheque: You'll be asked to write out the cheque there at the counter.
- Teller authorizes cheque: Once you've written the cheque, the teller will use either an official stamp, mark, or some kind of signature to show that it's been authorized by the bank.
- Pay fees: If there are any bank fees involved, you'll be asked to pay the required costs.
While you can technically get a certified cheque from just about any bank or credit union, it can be complicated to show that you have the necessary funds if you don't hold an account at the bank you're visiting. The teller may have to call your bank to verify the information.
Either way, the transaction probably won't take more than a few minutes, and you'll be on your way with the cheque in hand.
How long does it take to get a certified cheque?
For issuing: a bank teller needs about 10 minutes to issue a certified cheque for you.
For recipients: the funds are available between 1 to 5 business days after the certified cheque is cashed.
The length of the wait period depends on the institution’s hold policies, the amount of the cheque, and additional verification requirements.
How much does a certified cheque cost?
Fees for certified cheques are between $10 to $20. These can vary, depending on whether you’re the one issuing the cheque or you’re the recipient.
It's possible that your banking package covers the cost of certified cheques, but this isn't as common as it once was.
This table shows what some of the big Canadian banks charge when a client requests a certified cheque to be issued.
| Bank | Fee for someone issuing a certified cheque | Fee for someone cashing a certified cheque |
|---|---|---|
| BMO | $15 | $20 |
| TD | $10 | $15 |
| Scotiabank | $15 | $15 or $25 |
You’ll notice that Scotiabank has 2 different fee options for the recipient of a certified cheque – if the recipient is not a Scotiabank client, they’ll have to pay a higher fee.
Are certified cheques safe?
Yes, certified cheques are considered a safe and secure form of payment.
Certified cheques have safety benefits for the issuer and recipient, including:
- Account holder’s signature and identity are verified by a teller
- Cash availability is guaranteed from the bank with a hold
- Harder to steal than cash
Personal cheques do not offer the benefits of certified cheques.
While certified cheques are safe, cashier’s cheques (aka, bank drafts) are considered even more secure. That’s because the funds are held by the bank rather than inside a personal account until the transaction is complete.
The alternatives to using certified cheques
Here are a few of the most popular alternatives to certified cheques, and reasons why you might choose or avoid them:
| Alternative option | Pros | Cons |
|---|---|---|
| Regular cheque | * Easily accessible * No fees involved | * Not verified by the bank * Recipient has no guarantee the funds are available * You still have to buy books of cheques |
| Bank draft | * Issued/guaranteed by the bank * Low fees * Available in multiple currencies | * Requires a trip to a bank branch * Can’t be cancelled after delivery * Requires paying a fee |
| Cashier’s cheque | * Same as a bank draft | * Same as a bank draft |
| Money order | * Funds are guaranteed * Recipients name adds extra security * Doesn’t show your personal financial info * Doesn’t require a bank account * Can be refunded if it’s not cashed | * Require a trip to a bank branch or Canada Post location * Often limited to $1,000 * Can be counterfeited * Requires paying a fee |
| Interac e-Transfer | * Easily sent from most electronic devices * Transfers are fast * Often available for free | * Can’t be sent internationally * Funds aren’t quite guaranteed * Banks enforce per transaction and per day limits * Sometimes requires a fee |
| International money transfer | * Multiple currencies available * Transfers are quite fast * Easily sent from most electronic devices | * Funds aren’t quite guaranteed * Per transaction limits * Requires paying fees, including often-hidden FX conversion fees |
| Wire transfer | * Funds are guaranteed * Easily sent from most electronic devices * Nearly instant transfers * Very safe | * Will only transfer from bank-to-bank * Requires paying fees * Transactions are irreversible |
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$25 GeniusCash + Delicious meal choices with fresh ingredients + Front-door delivery.Certified cheque vs. regular cheque
For the check-writer, certified cheques are more inconvenient than regular personal cheques.
- Certified cheques cost a fee to issue.
- Certified cheques are only available at a bank.
You do have to order your cheques in the first place, but you may have a chequing account that provides a certain amount of them for free (like the Scotiabank Ultimate Package).
For the recipient, however, certified cheques are much safer than regular personal cheques.
- Sender’s identity and signature are verified at the bank.
- Funds are guaranteed by the bank, so no risk of a cheque bouncing.
The only drawback for the recipient is that banks typically charge a fee to cash a certified cheque.
Bank draft vs. certified cheque
A bank draft and a certified cheque are both guaranteed forms of payment.
- A bank draft is more secure than a certified cheque.
- All the big banks charge a fee to issue bank drafts and certified cheques.
Here’s the key difference: With a bank draft, the bank sets the funds aside and holds them until the recipient deposits the draft. With a certified cheque, your funds remain in your personal account until the cheque is cashed.
Cashier's cheque vs. certified cheque
"Cashier's cheque" is another term for a bank draft.
With cashier’s cheques and bank drafts, the funds are more secure than with a certified cheque because the recipients get the money from the bank, not from you.
How to get one: While not all big banks in Canada offer "cashier’s cheques," most big banks offer bank drafts.
Certified cheque vs. money order
A money order is similar to a certified cheque, but money orders are considered slightly less secure than certified cheques.
Certified cheques come from the bank, not you:
- Require a checking account to issue
- Certified by a bank employee
- Identity is verified
- Funds are verified
- Fee to issue
- Fee to cash
- No maximum limit on certified cheques
Money orders can be bought with cash or a debit card at a post office:
- Does not require a bank account to issue
- Funds are handed over at the time of purchase
- No verification of identity
- Fee to issue
- No fee to cash at a post office with ID
- Maximum limit of $1,000 on money orders
If you can’t find any of your own bank's branches nearby – or if you don't have a bank account at all – you can purchase a money order more easily than a certified cheque.
Interac e-Transfer vs. certified cheque
Interac e-Transfer is a popular electronic alternative to a certified cheque.
- Can be completed on computer or mobile device
- Interac e-Transfer limits apply, depending on your bank (usually $3,000/day)
- Typically free, though fees may apply
Funds are not guaranteed with Interac e-Transfer, as they are with a certified cheque. You could send an e-Transfer and spend that money before the recipient has a chance to deposit it.
International money transfer vs. certified cheque
The biggest difference is that International money transfers are intended for sending money to other countries and in other currencies, not for domestic transfers within Canada.
- Send money in a variety of currencies
- Can take as little as one day
- Several international money transfer services available
Fees are higher with international money transfers: From bank fees, foreign transaction and/or conversion fees, transfer fees, and occasional fees from the recipient's bank, expect this to cost more than a certified cheque would cost.
Wire transfer vs. certified cheque
Wire transfers move money from bank account to bank account, whereas certified cheques can be cashed directly.
Fees apply for both wire transfers and certified cheques, but a wire transfer guarantees that the recipient will indeed receive the funds – wherever they are.
FAQ
What makes a cheque certified?
It’s called a “certified” cheque because the document has been verified and approved by the payer’s banking institution. A representative will apply the bank’s official stamp, mark, or other kind of signature to prove this.
What is the difference between a certified cheque and a cheque?
A certified cheque is written out in front of a bank teller, and the bank guarantees that the money is available in your account. A personal cheque, though, can be made out any time, anywhere, and carries no such guarantee.
How long does it take to get a certified cheque?
It takes about 15 minutes to request a certified cheque, but it may take one or more business days to receive the check in the mail or by picking it up in-person. Then, the recipient may face a several-days’ hold on the funds before they are deposited.
Can you cancel a certified cheque?
No, once a cheque is certified it cannot be cancelled.
How do I certify a cheque?
You cannot certify it yourself. A bank employee must be the one to certify the cheque, by verifying the funds in your account and placing a hold on the amount before stamping and sealing it.
What is a bank draft vs. certified cheque?
When you cash a bank draft, the funds come from a bank. But when you cash a certified cheque, the funds come from the payer’s own bank account. This makes a bank draft even more secure than a certified cheque.
Are there any known certified cheque scams?
Unfortunately, scams involving certified cheques do happen so you should beware. For example, a potential buyer could tell you that they will mail/email a certified cheque as payment but someone else will pick up the item for them.
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