Get Cashiers Check Stop Payment Request And Indemnification

A cashier's check is a check issued by a bank and payable to a specific person. Because a cashier's check is issued by a bank, itself, the cashier's check is paid by funds of the bank and not the depositor. Therefore, if an item is genuine, there is very little risk that the instrument will be returned.

As a rule, the only time a bank may refuse to pay its cashier's check is when the bank has its own defense against paying the item and the person attempting to enforce payment is not a holder in due course.

The short answer to this question is yes, a cashier's check can be voided. However, the exact process will depend on your bank and whether you are in possession of the check-in question. Generally, most banks take around 90 days to refund the voided check and also charge a cancellation fee.

An indemnity bond is a type of insurance policy. It ensures that you—not the bank—will be liable for any losses if the lost check is found and presented for payment. Otherwise, the bank could be liable for both checks.

Here's how a lost instrument bond works. You'll need to purchase a lost instrument surety bond for the amount of the cashier's check, but you'll generally pay 1% to 5% of the check amount based on your personal credit and financial strength. The better your credit, the lower the bond premium will be.

However, be aware that a financial institution may issue a stop payment on a cashier's check under specific, limited circumstances in compliance with the Uniform Commercial Code, typically for lost or stolen cashier's checks. Don't assume you have the funds until the cashier's check has cleared.

If someone wants to pay with a cashier's check or money order, consider asking for an alternative form of verified payment such as a wire transfer, an electronic funds transfer, or cash. If they insist on a cashier's check or money order, accompany them to the bank or store, and watch a professional issue the payment.

The bank deposits those funds and then issues the cashier's check to the designated payee for the amount requested. The check cannot be cashed by anyone but the designated payee and settlement is usually quicker than with a personal check.