Certified checks, also known as cashier's or official checks, do not go stale or expire, so in theory you can buy a certified check and cash it many years later. Nevertheless, state laws relating to unclaimed and abandoned property often make it difficult to negotiate these checks if a number of years have passed since the issue date.
Banking industry insiders use the term "stale dated" to refer to checks that are more than six months old. Laws related to the negotiation of checks are set at the state rather than federal level, but all 50 states have banking laws that are based on the Uniform Commercial Code. This code, which was created by lawyers to facilitate interstate commerce, states that banks do not have to honor checks that are more than six months old. However, certified checks, travelers checks and money orders are exempted from this provision of the UCC and banks must honor these items.
In ancient times, escheat laws meant that when people died, the state assumed control of their property. In modern times, escheat laws exist in all 50 states that require banks and other financial institutions to surrender "abandoned property" to the state. Escheat laws vary between states, but in some states, such as Vermont, banks must surrender funds held in bank accounts that have been inactive for three years. This includes funds that are in held accounts to cover outstanding certified bank checks.
If you attempt to negotiate an old certified check only to find that your bank has surrendered the money to the state, you can still reclaim your money. You must file a claim with the state and provide documentary evidence, such as your certified check, to support your claim. Generally, your state's abandoned property fund will reimburse the money to you, but obviously this takes a lot longer than just cashing a certified check at a bank.
When you buy a certified check, the bank that issues it has a legal obligation to cash that check when you present it for payment. However, banks often merge and some banks become insolvent and are shut down the the Federal Deposit Insurance Corporation. If another bank buys out your bank, then the buying bank must honor your check. Certified checks are covered by FDIC insurance up to $250,000, so if the bank that issued your check goes bankrupt, you can claim your funds back from the FDIC. You stand to lose any funds in excess of the FDIC coverage limit.
- Vermont Office of the State Treasurer: Frequently Asked Questions About Unclaimed Property
- American Bankers Association; Unclaimed Property; July 2005
- Federal Deposit Insurance Corporation: Failed Bank Information
- Federal Reserve Bank of New York. "Historical Echoes: Cash or Credit? Payments and Finance in Ancient Rome." Accessed Nov. 1, 2020.
- Rare Book Buyer. "Newly Discovered Oldest Surviving American Checkbook." Accessed Nov. 1, 2020.
- Bank of America. "Bank of America revolutionizes banking industry." Accessed Nov. 1, 2020.