Are you torn between using a money order or a cashier’s check? Though money orders and cashier’s checks share some similarities, they are not the same. Each is ideal for different situations. So, if you aren’t sure what to use, you should first understand the difference between a money order and a cashier’s check.
The main difference between a money order and a cashier’s check is that the former can be purchased at multiple institutions like grocery stores, pharmacies, post offices and a cashier’s check can be obtained only from the bank.
Money orders and cashier’s checks are two great payment options for paying bills and making purchases. However, to help you determine the ideal option for your need, you’ll need to understand their differences. Read on to find out more.
Money Order vs Cashier’s Check
To understand the difference between a money order and a cashier’s check, you need first to understand what a money order and a cashier’s check are.
Have you ever heard of a money order?
Yes? Good for you!
No? Here is what a money order is:
Say you are buying your friend’s Nintendo for $300. You can visit an institution that sells money orders, such as a grocery store, pharmacy, or post office, and purchase a $300 money order. They’ll print the money order out along with the correct detail, like your name, the recipient, and the amount.
Afterward, you’ll give the money order to your good friend. In return, he’ll give you the Nintendo game. And then he’ll take the money order to the bank and either cash it or deposit it, the way it is with a check.
Next, let’s look at what a cashier’s check is.
A cashier’s check is a check drawn from the bank’s fund, not yours, and signed by a cashier or teller. Unlike a normal check, the bank, not the check writer, guarantees a cashier’s check payment. A cashier’s check is also synonymous with an official check.
Difference Between Money Orders and Cashier’s Checks:
The main difference between cashier’s checks and money orders is their cost and where they are bought. While money orders can be purchased at different locations with a few dollars, cashier’s checks, on the other hand, are often issued in huge amounts and can be bought from your bank. They also cost more than money orders.
Depending on the purpose of the money, here is a little information regarding the differences between a cashier’s check and a money order.
A money order is a prepaid piece of paper, like a check, that you receive instead of cash. You can use money orders to send people money, and the recipient can easily deposit them into their bank accounts.
Many institutions sell money orders. These institutions are the post office, Walmart, and Western Union, including many supermarkets and convenience stores. Money orders cost just a few dollars and are normally gotten for amounts up to $1,000.
A cashier’s check is just like a money order. However, it is issued by a bank and requires a bank account. When you receive a cashier’s check, your bank will either hold or remove the funds from your account and offer you a bank-issued check in the amount you need. Cashier’s checks can be used like money orders or personal checks; the only difference is that since the funds are guaranteed by a bank and already withdrawn from your account, recipients can have quick access to the funds.
Cashier’s checks, while more costly than money orders, may be considered more secure and trustworthy as they are supported by a bank but can still be purchased for a small amount of money (below $10).
When to use a Money Order?
Unlike a personal check, when you offer someone a money order, they know the money is guaranteed. While with a typical check, it normally takes some days before recipients can get the money, as the receiving bank has to ensure that the sender has adequate money to cover the amount.
Use a money order in cases where you need to pay someone and need the payment to be secure but available ASAP.
Because money orders are prepaid and supported by a third party, they can be used for situations where you need to provide immediate funds but still want to do it securely. For instance, you could use a money order when paying for something at the Department of Motor Vehicles, where funds need to be sent immediately.
When you fill out a money order, you’ll sign it and choose a recipient, creating an official record and making it a more secure option than cash.
Money orders can also benefit those without a bank account. If you have bills or need to initiate an official payment, money orders provide a secure way to transfer money without a bank account. It depends on where you purchase it, but some issuers allow you to use a credit card, check or debit to buy a money order.
When to Use a Cashier’s Check?
When it comes to transactions, there are several options to select from.
So when should you use a cashier’s check?
Cashier’s checks are normally used when you need to initiate a big purchase and are asked to bring guaranteed funds, like when you are closing on a home or buying a new ride. Rather than move around with a bag of money, cashier’s checks make it easy to move and facilitate huge payments.