A certified check is a personal check that the payers bank has certified to be legitimate and has earmarked the funds for the check. 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 banks internal account until the check is cashed or returned by the payee. The certification process physically marks the check indicating it is now a certified check and earmarks the funds for that check. Thus, a certified check cannot be stopped or bounce, and, in this manner, its liquidity is similar to cash barring bank failure or an illegal act (such as the funds being based on a fraudulent loan, at which point the check will be disavowed).

Certified checks are often used in large-dollar transactions, such as a down payment on a car, or in transactions when the buyer and seller don’t know each other. They are useful when purchasing pricey items, as it is impractical and dangerous to carry that amount of cash on you. A certified check guarantees the recipient that the bank has verified the check, signature, and availability of funds.

It is important to note that certified checks are not the same as cashiers checks, although they are both considered official checks. A cashier’s check is a check backed by the bank, while a certified check is a personal check that the bank has certified and is drawn on personal funds.