As a prospective renter, you have probably come across the term ‘certified funds’. But what does it mean? Certified funds refer to payment that is guaranteed for clearance by the issuing company. Let’s take a look at what certified funds mean specifically for the apartment rental industry.
Certified Funds in the Apartment Rental Industry
Certified funds guarantee that the landlord will receive payment. This is different from non-certified funds, which is basically a personal check. If a landlord goes to deposit a personal check, there is the risk that the check bounces and payment is denied. Then, the landlord would be out of luck. However, with certified funds, the payments are guaranteed to clear by the company certifying the funds.
Types of Certified Funds
While you should confirm with your specific landlord their expectations on certified funds, some acceptable forms of certified funds include:
This is typically issued by a bank and proves that the tenant’s bank account has sufficient funds to make the payment. The teller may set aside the amount the check is written for so it is available when check is cashed.
A cashier’s check is issued by the tenant’s actual bank. For this option, the bank withdraws the funds from the account and guarantees the amount written on the check. Landlords need not worry about payment because the funds have already been withdrawn for payment.
Money orders can be issued by a bank, convenience store or post office. The tenant transfers the funds to the issuing authority to receive the money order, which is then given to the landlord. Since the tenant has already paid, there is no risk to the landlord.
Online wire transfers from the tenant’s bank account to the landlord may also be an acceptable payment. There might be a waiting period involved and also hefty fees, so this is typically not used in the rental industry.
Cash is another option for receiving rental payments every month, which can also be extremely easy. However, there may be certain difficulties and disputes associated with cash rental payments such as lack of proof, so it is not as popular as other options.
It is good to know the various payment options you have at your disposal, so you can choose the most convenient one for you and your landlord. Happy Renting.