Financial institutions in Canada process nearly one billion cheques every year, and many scammers use this opportunity to commit cheque fraud.
Many sellers might be skeptical about receiving a cheque from a stranger, so you can issue a certified cheque to ease their minds. If you’re unfamiliar with this form of monetary transaction, you might be wondering what is a certified cheque?
A certified cheque is a personal cheque with the bank’s stamp of approval, which is the financial institution’s way of confirming that you have sufficient money to process the cheque. There are a few benefits of using a certified cheque as your payment method for significant financial investments or purchases.
Proves Your Credibility to Sellers
A certified cheque helps sellers put their faith in you during a transaction involving a large sum of money. Since the bank puts an approval stamp on the cheque, it is an official document confirming that you’re financially capable of paying for the good or service you’re purchasing.
If you’re using a certified cheque for investments, it may open up a broader scope as it reflects your financial abilities.
Less Susceptible to Fraud
Certified cheques are generally safe and less susceptible to fraud. The bank has to be involved in verifying if the account holder has sufficient funds, which reduces the risk of a buyer writing a cheque that may not work. There is a lower risk of a certified cheque bouncing.
It is not impossible for scammers to use certified cheques to their advantage. The cheque recipient may call the bank to confirm that the cheque is original to clear any doubts.
Helps Build Relationships with Sellers & Businesses
When you use a certified cheque for transactions, many sellers or businesses may trust you more, leading to a relationship with them. This could open up more opportunities in your life and allow you to expand your business or other aspects of your life.
A positive connection with an individual or entity can also be helpful in the long run, depending on your personal life and career goals. The connections you build could also be testimonials or references for your credibility if you need them to be when dealing with someone new.
Guarantee of Successful Transaction
A certified cheque is a great way to guarantee a successful transaction as it reduces the risk of attempting to cash a bounced cheque. Although the cheque might go on hold for a limited time, it is a standard procedure many Canadian financial institutions follow.
The guarantee of a successful transaction can save both you and the seller time, allowing you to focus on other aspects of the transaction, especially if it is business-related.
A certified cheque reduces risks for everyone involved in a transaction. The primary goal of the cheque is to ensure that the person getting paid knows there are sufficient funds in the account holder’s bank. As a buyer, a certified cheque can help you in many ways, as mentioned above.