A registered check is guaranteed by the bank and considered legally equivalent to cash. It can be obtained by presenting enough funds to the bank and is not subject to holding periods. However, it cannot be cancelled and may incur fees.
A registered check is a check that a bank guarantees, ensuring that the check will not bounce for insufficient funds or for any other reason. Barring the bankruptcy of the bank, the payee of a registered check must be able to access the funds by depositing the check or going into the bank at which it is drawn to cash it. This particular financial instrument is sometimes considered legally equivalent to cash, and may be treated and handled as cash in some settings.
To obtain a registered check, a person presents a bank with enough money to support the check. This can be done by writing a check on an existing bank account and having the bank hold the funds, or by depositing money into a special register that the bank uses to cover posted checks. Essentially, the bank receives funds at the time the check originates, and therefore knows that the funds will be available.
A bank teller prepares a check with marks to indicate that it is registered. Some banks will allow people to write a check from their regular checkbook and then add stamps to the check to show that it is registered and not an ordinary check. People can write registered checks to themselves, a tactic sometimes used when moving money between accounts and for other tasks where people want the instant availability of cash without the risks of carrying cash.
Because it is guaranteed by the bank, a registered check is not subject to the same holding period used for other types of checks. For certain types of transactions, people may be asked to pay with a registered check to confirm funds are available. This can be done for a down payment on major purchases, along with other activities like buying cars or placing mail orders.
One risk to a registered check is that it generally cannot be cancelled. If a check is lost or stolen, a stop payment order may not be able to be placed to ensure the funds don’t go to the wrong person. If this is a concern, people should ask the bank of origin what would happen if a stop payment order were necessary.
Also known as certified checks, registered checks are used in much the same way as money orders. People should be aware that the bank typically charges a fee, usually based on a percentage of the total amount, to issue registered checks. Some bank accounts may provide individuals with a limited number of free registered checks each month as part of a premium package.
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