A certified check or certified cheque is a form of check for which 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 bank's internal account until the check is cashed or returned by the payee. Thus, a certified check cannot "bounce", and, in this manner, its liquidity is similar to cash, absent failure of the bank.
In some countries, e.g. Germany, it is illegal for a regular bank to certify checks. This regulation is supposed to prevent certified checks from becoming a universal substitute for cash, which is considered the only legal tender. The Deutsche Bundesbank (Federal Bank) is the only financial institution authorized to issue certified checks.
The liquidity and certainty of payment of a certified cheque explains the fact that it is sometimes considered equivalent to cash, such as in the regulation of credit for casino gaming in Macau, where the law explicitly states that if a casino patron obtains casino chips and pays with a certified cheque, the transaction is not regarded as credit for gaming (see Law 5/2004, art. 2).
Famous quotes containing the words certified and/or check:
“Faith means belief in something concerning which doubt is still theoretically possible; and as the test of belief is willingness to act, one may say that faith is the readiness to act in a cause the prosperous issue of which is not certified to us in advance.”
—William James (1842–1910)
“cried as he died, fearing at last the spheres’
Last sound, the world going out without a breath:
Too proud to cry, too frail to check the tears,
And caught between two nights, blindness and death.”
—Dylan Thomas (1914–1953)