Table Of Contents
- Both money orders and cashier’s checks offer a high level of safety, as they are guaranteed forms of payment backed by financial institutions.
- Money orders can be acquired at local stores or post offices, and cashier’s checks are typically issued by a customer’s current bank.
- Money orders usually have a lower fee compared to cashier’s checks, making them more cost-effective for smaller transactions.
When payment with a personal check isn’t possible due to the need for certified funds, understanding the differences between money orders and cashier’s checks can help you make an informed choice on when to use them.
Comparison Of Cashier’s Checks And Money Orders
| Features | Cashier’s Check | Money Order |
|---|---|---|
| Transaction Limit | Typically none | $1000 domestically, $700 or less internationally |
| Bank Account Requirement | Yes | No |
| ID Requirement | Yes | Yes |
| Typical Fee | $10 to $20, depending on the bank | $1 to $5, depending on the issuer |
| Credibility | Higher credibility, as it’s drawn on your bank’s funds | Backed by a third-party issuer |
| Clearance Time | 1–3 days | Immediate |
When To Use Them
Cashier’s checks are typically used for larger purchases, such as:
- Down payment on a home
- Car purchase
- Large appliances, such as refrigerators
- College tuition
- Loan repayment
- Business transactions
- Security deposit
Money orders are commonly used for handling transactions with smaller amounts, for example:
- Rent payment
- Utility bills
- Online purchases
- Sending money abroad
- Subscriptions
- Membership fees
Where To Get Them
Money orders are more accessible than cashier’s checks. You can buy them locally at convenient locations, such as post offices, retail stores, banks, and even supermarkets.
Cashier’s checks are provided by banks, and you need to be a customer to get one. Issuers require you to visit in person to get a cashier’s check, so online purchases aren’t an option.
Safety Differences
Cashier’s checks have the advantage when it comes to safety. If a cashier’s check is lost or stolen, you can go to your bank and ask for a new one or a refund by simply showing your receipt. In most cases, you need to purchase an additional indemnity bond from an insurance company that protects the bank in case of another loss. This process can take anywhere from 30 to 90 days.
Money orders require you to fill in the receiver’s name. If the money order gets lost before you fill it in, then anyone who finds it can cash it. And once this happens, you might never be able to recover your lost funds. Addressing a fraudulent money order involves a lengthy legal process, costing you time and possibly more money.
Cashing Money Orders And Cashier’s Checks
Money order recipients can typically cash or deposit them into their bank accounts immediately. Keep in mind that banks or post offices may charge a small fee for cashing a money order if you don’t have an account with them. Once you deposit the money order, you can expect the funds to be available either the same day or the next business day—depending on your bank and when you make the deposit.
Cashier’s checks can be cashed or deposited immediately. However, some banks may place a hold on the funds for larger amounts to verify that the check is legitimate. This hold could last anywhere from 1 to 3 business days, and it all depends on your bank’s rules and regulations.
Looking to use a cashier’s check but don’t have a checking account? Explore the best checking accounts.
Protect Yourself From Fraud
Ensure you purchase your money order or cashier’s check from a reputable vendor.
For money orders, remember to fill in your information to prevent theft or fraud.
Finally, keep your receipts for all certified cashier’s checks and money orders, so if you need to stop the fund transfer, you can contact the issuer and follow their cancellation process.
Frequently Asked Questions (FAQs)
What is easier to cash—a money order or cashier’s check?
Typically, money orders are easier to cash and use for payments than cashier’s checks. This is primarily because they are more readily available and can be purchased easily.
Where can I get a cashier’s check?
Cashier’s checks are available primarily through banks. And, you will need to be a customer of the bank before you can purchase a cashier’s check.
Where can I get a money order?
Money orders are more readily available than cashier’s checks. You can purchase them at the convenience store, a bank, or even the Postal Service.
What are the advantages of money orders?
Money orders are advantageous because they are more accessible. They can also be easily cashed and are significantly cheaper than cashier’s checks.
What are the advantages of cashier’s checks?
Cashier’s checks are comparatively safer than money orders. If you lose one, you can report to the bank and follow their process for recovering your money.
Can anyone cash a cashier’s check?
No, this isn’t possible. A cashier’s check can only be cashed by the payee whose name is written on it.
Can I get a cashier’s check at any bank?
Cashier’s checks can only be acquired at your current bank.
Can a cashier’s check bounce?
A cashier’s check can’t bounce, as long as it isn’t a forgery.
