Cashier’s Check vs. Money Order: What’s the Difference?

Cashier’s check and money order both are beneficial tools to make payments and they also come with a similar appearance.

But there are some significant differences among the two that will determine which is the best for a person’s requirements.

In general, cashier’s check includes higher limits, but are can only be availed from any financial institution.

What Is A Cashier’s Check?

It is a type of official check which is issued by a bank. You should never confuse it with any certified check that is also issued by a bank.

A cashier’s check is secure as the bank directly takes the money from the account and then puts it on its own. Thus it is guaranteed that the check will not bounce. So whoever you require to pay the money will surely get it.

You do not need to worry about an overdraft or non-sufficient funds fees that are charged if you do not maintain sufficient money in the account for covering a check.

If you require to make any large payment for your car, then due to the safety factors cashier’s check will be a better option. Sometimes a cashier’s check might be the only payment alternative available for you. While buying a home, the lender will need you to bring a cashier’s check for paying whatever you owe at the time of closing.

Cashier’s check can also be fraudulent and involved in financial scams. Scammers are seen to give you something that looks similar to any official cashier’s check that you deposit in your account. After a few weeks, your bank will discover that this check is fake. So always be sure to check the authenticity before depositing the check or trying to cash it.

What Is A Money Order?

It is a secure payment.  Money orders can be bought easily and are less expensive.  Thus they are best suited for smaller payments or if you cannot write any personal check.

For example, you can make use of money order for paying your rent or sending $100 to a dear one who is running out of cash. If you purchase any money order, you need to pay for that with cash, debit card or a traveler’s check.

You can never use a credit card or write any personal check. If a credit card is used it will be treated as a cash advance. You also need to pay a fee for it but it is less expensive. On the basis of where you purchase a money order and what the amount is, the fee might be lower than $1 or equal to $5.

It is easier to replace a money order if they are stolen and lost.

You can replace a stolen or lost money order by returning with the receipt to that place from where you purchased it and then asking for a refund or a replacement. A fee may be charged by the issuer for replacing it. But you will receive it then only and do not have to wait for months.

Differences Between Cashier’s Check And Money Order

The main difference between cashier’s check and money order is the cost and from where they have been purchased. Typically money orders are usually offered in small amounts, can be obtained at several varied locations and are priced at a few dollars.

On the other hand, cashier’s check is mostly issued in huge amounts, can be obtained from a bank and cost more.

On the basis of what the money is used for, there lie some differences between the two type of payment options as mentioned here:

A money order is a piece of paper that is prepaid. It is exactly the same as a check that you receive in exchange for some cash. It can be used to send money to people and the recipients can also deposit them easily in their bank account.

You cannot get them from a bank. There are various places that sell these money orders such as post office, Western Union and convenience stores along with supermarkets. You can also cash your money order from these places. Money orders will cost you a few dollars and can be purchased until $1000.

A cashier’s check is almost similar to a money order, but it is issued by a bank and needs a bank account. If you obtain a cashier’s check, a bank will be holding or removing funds from your bank account and then send you a check issued from the bank in your requested amount. You need to pay a fee for it to the bank. You can use it similarly like a money order or a personal check.

The one and only difference is since the approved funds are guaranteed by a bank and then removed from an account, recipients can immediately access the funds. Cashier’s check is more costly than money order but is known to be more reliable as it backed by a bank. Although it is still received for a few dollars generally under $10.

If you plan to purchase anyone, check the fees that are involved and any limits put by the issuer on the money you can obtain them for. You need to keep a receipt or statement that shows when they were purchased if they are stolen, damaged or lost.