Unlike personal checks, certified checks do not go stale within six months. However, the statute of limitations governing checks in your state will affect when they go stale, though the check is good for three years on average.
Read on to learn in detail how certified checks work, when they go stale and how to cash checks of this nature.
Do Certified Checks Go Stale?
According to the Cornell Law School’s Legal Information Institute, the Uniform Commercial Code (UCC) § 4-404 states that banks are not obligated to pay any checks that are older than 180 days (six months), but may do so in good faith and charge the customer for processing an old check. However, an exception is made for certified checks. In that sense, these checks do not go stale within six months as personal checks or cashier’s checks do.
That said, there is a statute of limitations that dictates when a certified check may go stale. Based on the UCC § 3-118, the statute of limitations for certified checks is three years after the demand for payment is made. But the period may vary at state level. Beyond the stated time, banks may not be obligated to give the payee the funds you earmarked for them. So, that’s something to note.
How Certified Checks Work
Certified checks borrow the best features of other types of checks, i.e., cashier’s checks and personal checks.
According to Forbes, a cashier’s check is a check that draws money from the bank’s own account and will have its account number. The money is usually transferred from the check writer’s account to enable the bank to guarantee payment. The Office of Comptroller of the Currency states that people consider cashier’s checks trustworthy for that reason. But they tend to attract an additional check fee.
Typical certified checks, like personal ones, will draw funds for the payee from the account holder’s checking account. But like cashier’s checks, the financial institution will first confirm that you have sufficient funds to cover the payments to the payee. Then they will certify that check officially as such using a physical mark. That is why, together with cashier’s checks, they are considered forms of official checks, making them the best options for large purchases.
Once the issuing bank certifies a check, the money in your bank account becomes earmarked for the stated payment. And that means you are unlikely to access it unless you cancel the check. You also need to remember that you must be an account holder at a brick-and-mortar bank or credit union to get certified checks. These forms of payment are often unavailable to online account holders.
Handling a Stale Check
If you have a certified check that is more than six months old, you may still be able to cash it if the issuing bank is willing to give you access to the funds. But you may also have to pay an extra fee.
However, if the owner of the checking account is dead, the money in the account may be handed over to the state as abandoned property after it has remained inactive for a specified period. That period is usually five years but may vary based on state. The Investor government website calls this process escheatment.
To claim the amount of the check, you would need to file a claim based on your state laws. And after providing the certified check evidence, you may receive compensation via your state’s unclaimed property fund.
But it’s a different matter if the issuing bank went broke or was acquired by another bank. If it went broke, as long as the check is valid and insured by the Federal Deposit Insurance Corporation (FDIC), you are likely to get your money since it will be insured to the tune of $250,000 per account category. And if it was acquired, the new bank could still honor your certified check.