Difference between Cashier’s Check and Money Order

Cashier’s Check

A cashier’s check is defined as an official check which is issued by the banks. This check must not be confused with the certified checks which are drawn on the checking account of the depositors. If an individual purchases the cashier’s check, the bank will transfer the money from their savings account into the customer’s account. The bank writes a check to the other party where the individual has to pay. The depositor needs to pay a fee to avail of the cashier’s check facility.

The advantage of using this facility is that it is much more secure. As the bank also takes the total amount directly from the depositor’s account and then puts that down on their own, the final check will be guaranteed not to bounce. It means that whoever the person needs to pay will be guaranteed to get the total money. And you don’t have to worry about overdraft or insufficient funds fees which are then charged when there is ample money in the account to cover a check.

The Cashier’s checks aren’t foolproof, though, which is why you should contact the bank to ensure that the check is authentic before trying to deposit or encash it.

Money Order

Money orders are also defined as a method of making a payment to another person or organisation. When someone purchases a money order, they have to pay for it by cash, with a debit card or using a traveller’s check. It is important to note that generally, a credit card or personal check cannot be used for making payments for money orders. In case a person uses a credit card, it could also be treated as cash advances. Like the cashier’s checks, you will get to pay a fee for the money order, but they are also very inexpensive.

One advantage of money orders is that they are usually easier to replace when compared to cashier’s checks in case they get lost or stolen. Replacing a stolen or lost money order is as simple as returning your receipt where it was purchased and ask for a refund or replacement. The money-order issuer may charge you a fee to replace it, but you can get it right away instead of waiting months for a cashier’s check to be reissued.

Difference between Cashier’s Check and Money Order

Both cashier’s check and money order perform a very important role in the financial world. You can use these financial instruments to deposit or make payments. However, it must be noted that there are major points of difference between cashier’s check and money order, and we should focus on those points below to get a wider perspective of these two instruments:

Cashier’s Check

Money Order

Definition

A cashier’s check is issued by and purchased at a bank.

A money order is purchased at retail stores, post offices, check cashing places, banks, and more.

Bank Account

You need a bank account for a cashier’s check.

You do not need a bank account for a money order.

Security

A cashier’s check is considered more secure when compared to a money order.

A money order is considered less secure when compared to a cashier’s check.

Transaction

A cashier’s check is useful for transactions with a larger amount.

A money order is useful for transactions with a smaller amount.

Conclusion

There are a number of points of difference between cashier’s check and money order. But they perform a very crucial role in terms of payments for financial transactions. It is essential that more individuals and corporations use these instruments. They have an important role in the payment ecosystem.

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