What happens to the original funds when a certified bank check is not cashed?

Question

When a bank issues a certified check that was funded from my account, where will the funds end up if the recipient never cashes the check before it expires?

Answer 1

The answer probably varies with local law, and you haven't said where you're located.

In most or all US states, it appears that after some statutory length of time, the bank would transfer the money to the state government, where it would be held indefinitely as "unclaimed property" in the name of the recipient (technically, the payee, the person to whom the check is made payable). This process is called escheatment. Most states publish a list of all unclaimed property, so at some later date the payee could find their name on this list, and realize they were entitled to the funds. There would then be a process by which the payee could claim the funds from the state.

Usually the state keeps any interest earned on the money.

As far as I know, there typically wouldn't be any way for you, the person who originated the payment, to collect the money after escheatment. (Before escheatment, if you have the uncashed check in your possession, you can usually return it to the bank and have it refunded to you.)

I had trouble finding an authoritative source explaining this, but a number of informal sources (found by Googling "cashier check escheatment") seem to agree that this is generally how it works. Here is the web site for a law firm, saying that in California an uncashed cashier's check escheats to the state after 3 years.

Until escheatment occurs, the recipient can cash the check at any time. I don't think that cashier's checks become "stale" like personal checks do, and there isn't any situation in which the funds would automatically revert to you.