Certified check

Certified check

A certified check or certified cheque is a form of check for which the bank verifies that sufficient funds exist in the account to cover the check, and so certifies, at the time the check is written. Those funds are then set aside in the bank's internal account until the check is cashed or returned by the payee. Thus, a certified check cannot "bounce",[citation needed] and, in this manner, its liquidity is similar to cash, absent failure of the bank.

In some countries, e.g. Germany, it is illegal for a regular bank to certify checks.[1] This regulation is supposed to prevent certified checks from becoming a universal substitute for cash, which is considered the only legal tender. The Deutsche Bundesbank (Federal Bank) is the only financial institution authorized to issue certified checks.

The liquidity and certainty of payment of a certified cheque explains the fact that it is sometimes considered equivalent to cash, such as in the regulation of credit for casino gaming in Macau, where the law explicitly states that if a casino patron obtains casino chips and pays with a certified cheque, the transaction is not regarded as credit for gaming (see Law 5/2004, art. 2).

Banks such as U.S. Bancorp in the United States will still place a hold on certified checks on new accounts for 5 business days. The explanation given is that it is due to fraud and it is for the account holder's protection.

See also

References

  1. ^ Art. 4 of the German Check Code (Scheckgesetz)

External links



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Look at other dictionaries:

  • certified check — see check Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. certified check n …   Law dictionary

  • certified check — n. a check drawn on a bank and bearing marks from that bank guaranteeing that funds have been reserved for payment. [PJC] …   The Collaborative International Dictionary of English

  • certified check — ☆ certified check n. a check for which a bank has guaranteed payment, certifying there is enough money on deposit to cover the check …   English World dictionary

  • Certified Check — A type of check where the issuing bank guarantees the recipient of the check that there is enough cash available in the holder s account to be transfered when the check is used and also that the account holder s signature on the check is genuine …   Investment dictionary

  • certified check — noun a check containing certification that the person who issued the check has sufficient funds on deposit to cover payment • Syn: ↑certified cheque • Hypernyms: ↑check, ↑bank check, ↑cheque * * * (US) (or Brit certified cheque) noun …   Useful english dictionary

  • Certified check — Certify Cer ti*fy, v. t. [imp. & p. p. {Certified}; p. pr. & vb. n. {Certifying}.] [F. certifier, LL. certificare; L. certus certain + facere to make. See {Certain}, and cf. {Certificate}, v. t.] 1. To give cetain information to; to assure; to… …   The Collaborative International Dictionary of English

  • certified check —    A check issued by a bank that certifies that the maker of the check has sufficient funds in his or her account to cover the amount to be paid. The bank will already have set aside the funds, so that the check will remain good even if other… …   Business law dictionary

  • certified check — The check of a depositor drawn on a bank on the face of which the bank has written or stamped the words accepted or certified with the date and signature of a bank official. The check then becomes an obligation of the bank. The certification of a …   Black's law dictionary

  • certified check — The check of a depositor drawn on a bank on the face of which the bank has written or stamped the words accepted or certified with the date and signature of a bank official. The check then becomes an obligation of the bank. The certification of a …   Black's law dictionary

  • certified check — A check upon which the drawee bank has stamped or written the words certified, “good,” accepted, or an equivalent expression, with the signature of the certifying officer, the effect of which stamp is equivalent to an acceptance of a bill of… …   Ballentine's law dictionary

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