No problem. I'm happy to help. I've been in banking almost 20 years, although I started very young.
I know if most of our clerks were asked for the difference, they'd be hard pressed to give a good answer to your questions. From experience, this is true in most banks.
it seems like there really are only 4 types of checks that i was wondering about then:
Cashier's Check, Official Bank Check, Money Order, and Certified Check.
Yep. They are just called different things by different banks. For all intents and purposes, an Official Bank Check and a Cashier's check are pretty much the same, so you can actually consider 3 different types.
if you were the payee, and wanted to make sure that you actually get your payment, would either of these 4 types of checks suffice? is there any one of these 4 that is
more guaranteed than the others?
All of them pretty much guarantee payment, I can find the regulation tomorrow, as I have to pick up my kids tonight, if you want that governs stop payments on these items. There are very few instances where payment can be stopped on them, thus making them very good guarantees of payment.
[*]are these 4 types of checks just like cash? i.e. there will be no such thing as a bounced check when you deposit/cash these?
None of these items should ever bounce, as they are bank-managed accounts. There are the times, however, where stops are authorized by law, but they are very specific and cannot be made just because you didn't like the service, etc., for which you are paying.
[*]i'm still not quite clear about the difference between a Cashier's Check and an Official Bank Check. they seem almost exactly the same. can you give one or two other examples of the difference between these two?
Cashier's checks and Official Bank Checks can really be the same thing. If a bank is going to specifically have both types, they will offer Cashier's checks to the general public for the consumer's purchases, but will use Official Bank Checks to fulfill their own obligations. FWIW, in the big picture, a holiday club check, a CD interest check, an IRA disbursement check are all considered official bank checks, too, that would be held in separate accounts and used for specific purposes. Typically, though, an official bank check would predominantly be used to pay your mortgage proceeds to the person from whom you bought your house, or to pay the dealer from whom you bought your car, etc.
[*]a Money Order seems to be exactly the same as a Cashier's Check, except it's for smaller $ amounts, and the consumer writes in the payee. are those two attributes the only difference?
OK, you want my tongue in cheek reason why people buy money orders? If you want to pay for something but you don't want your spouse to know how much it is, you'll purchase a money order, if it's under that dollar amount. Because the teller you went to won't have to know to whom you're making it payable, you won't have to worry about running into her in the grocery store and her asking your DH how you like your new "whatever" from Store X. She'd never know what the check is for, or be able to assume what it's for. For all she knows, it is a gift for your sister whose out of town.
Seriously, though, if you want to buy a bunch of stuff from an adult bookstore and not have it show up on your records, you can buy a money order for it, and you'd be the only person who knows about it.
If you were to buy a cashier's check for that purchase, you'd have to tell the teller to make it payable to the bookstore, and now they would wonder about you. (I'm trying to make this example somewhat silly, but you get my point.)
That's one reason. The bad thing about money orders is that because the bank doesn't keep a record that you are the purchaser of the MO, if the party to whom it's paid never cashes it, and 5 years (in PA) goes by, the bank has to escheat the money for the check to the state. If you have a cashier's check, we can typically trace it back to you and ensure that at least you have the money returned to you, if we can find you, prior to the state getting it through escheat. Even if we have to escheat it, the state still has a record that you were the purchaser of the check, so you may or may not ever receive your money back.
[*]for Certified Checks, you say the account number is punched out from the bottom of the check. is this a Personal Check that gets the # punched out and a stamp to Certify it?
It is the personal check that has the holes punched through the account number. The bank is guaranteeing payment of this check through the stamp that is placed on it. The money is immediately withdrawn from your account and put into one of the bank's accounts to hold until payment of the check is requested.
The problem with certified checks (that would not be my preferred method of payment) is that within the last 10 years, there have been many documented cases of fraud regarding certified checks. There is nothing that prevents a criminal from making a stamp to match the bank's and punching out the holes. To anyone who receives the check, they'd have no idea that it is fraudulent. Yes, there are crimes committed with cashier's checks, too, but not as easily as with a certified check.
[*]what would be an appropriate situation where a consumer might want to choose to use a Certified Check vs. a Cashier's Check?
Some people request one type of check over the other, based on their preference. When I used to go to Ocean City, MD, for vacation, the realty company wanted certified checks, not cashiers checks. They'd also accept cash. So, I got my check certified for them.
[*]for these 4 check options, do all of them mean you immediately withdraw money from your bank account in order to "purchase" the check? i.e. if you had an Interest Checking Acct, there's no way you'd be earning any more interest on those funds. unlike a Personal Check where you might earn interest until the payee cashes/deposits your check.?
All of these checks immediately take money out of your account. Even the Official Bank Check, if you've taken out a loan, draws funds from the loan account to fund the check. You are correct, there is no float when the money is moved from your account. The bank has the benefit of the float between the time it is deposited into its account and the time the check is cashed.
i guess it sounded like maybe if you used a Certified Check, the funds might still be in your account sort of? or is that wrong?
Nope. It goes into the bank's account to await the request for payment. That's the way that the bank can guarantee that the funds are there.
Any other questions? Let me know.
