What is a Registered Check?

A registered check is a check that a bank guarantees, ensuring the check will not be refused for insufficient funds or any other reason. Barring the failure of the bank, the payee of a registered check should be able to access the funds by depositing the check or entering the bank it is drawn on to cash it. This particular financial instrument is sometimes considered legally equivalent to cash, and may be treated and handled like cash in some settings.

To get a registered check, a person presents a bank with enough money to back the check. This can be done by drawing a check on an existing bank account and having the bank place a hold on the funds, or by depositing money in a special register the bank uses to cover registered checks. Essentially, the bank is provided with funds at the time the check is originated, and thus, it knows that the funds will be available.

A bank teller prepares a check with markings to indicate that it is registered. Some banks will allow people to write a check from their regular checkbook, and then add stamps to the check to show it is registered and is not an ordinary check. People can write registered checks to themselves, a tactic sometimes used when moving money between accounts and for other tasks where people want the instant availability of cash without the risks of carrying cash.

Because the bank guarantees it, a registered check is not subject to the same holding period used for other types of checks. For certain types of transactions, people may be asked to pay by registered check to confirm that they have funds available. This may be done for down payments on major purchases, along with other activities such as buying cars or mail-ordering products.

One risk to a registered check is that it usually cannot be canceled. If a check is lost or stolen, it may not be possible to put a stop payment order on it to ensure that the funds are not released to the wrong person. If this is a concern, people should ask the originating bank about what would happen if a stop payment order was needed.

Also known as certified checks, registered checks are used much like money orders. People should be aware that the bank usually charges a fee, typically based on a percentage of the total amount, to issue registered checks. Some bank accounts may provide people with a limited number of free registered checks each month as part of a premium package.