When you need to send money securely, what’s your go-to payment method? For many people, it’s either a cashier’s check or a money order. But what’s the difference between the two? Which one should you use in your specific situation? In this definitive guide, we will answer all those questions and more! So whether you’re wondering about fees, delivery time, or how they work, keep reading for everything you need to know about cashier’s checks and money orders.
What is a Cashier’s Check?
A cashier’s check (also known as a teller’s check) is a type of check that the bank guarantees because it says that the funds within their account holder’s account can pay for the cashier’s check. When you get a cashier’s check for yourself to make a purchase, the amount is deducted from your account immediately. The funds are then transferred to the payee’s account when they deposit or cash the check, which has to take place at a bank.
One of the main benefits of a cashier’s check is that it’s a very secure form of payment. Since the funds come directly from the bank, there’s no risk of bounced checks or fraud. This makes cashier’s checks ideal for large payments, such as buying a car or a house, when a standard credit or personal card isn’t suitable.
What is a Money Order?
A money order is a type of prepaid payment that can be used to pay someone. Money orders are similar to checks in the sense that they are pre-specified amounts of money that can be redeemed for that value and that value only.
Money orders were first issued in 1882 by American Express. They later grew in popularity through the use of traveller’s checks.
To use a money order, you must go to a post office or a money transfer service and purchase one for the amount you need to pay. The funds for the money order are then deducted from your account. Once you have the money order, you can fill in the recipient’s name and address and send it off like you would a regular check. The payee can then take it to a bank or a post office to cash it. Like cashier’s checks, money orders are also a very secure form of payment since the issuer guarantees the funds. This makes them ideal for situations where you can’t use a personal check or when you need to send cash but don’t want to risk mailing it.
The most common issuer of money orders in the UK is the Post Office. In the US, money orders are typically issued by companies like Western Union and MoneyGram.
Like cashier’s checks, money orders are a secure form of payment. They are also a good option for people who don’t have a bank account because you don’t need one to get access to the money. You can take your money order to a bank and simply redeem it for cash in hand.
What is the maximum amount for a money order and cashier’s check?
In the UK, the maximum amount for a money order is £750. In the US, where money orders are more widespread in their use, the limit is $1,000.
The maximum amount for a cashier’s check is generally uncapped.
Which is safer to use between Cashier’s Check and Money Order?
Between a cashier’s check and money order, cashier’s check is generally considered the safer option. This is because the funds come directly from the bank with a cashier’s check. With a money order, the funds come from whoever purchased the money order in the first place.
Therefore, with a money order, there’s always a risk that someone could purchase a money order with fraudulent funds. This is known as a fake or counterfeit money order, which you should be aware of if you’re planning on using this payment method.
What are the advantages of using a Cashier’s check and money order?
So, moving into the pros and cons of each now, let’s start by diving into the real benefits of using each financial service, giving you a clear idea of everything you need to know when it comes to using the service that works best for you.
Let’s start with the cashier’s checks.
Firstly, cashier’s checks are a very secure form of payment. This is because, as we mentioned before, the funds come directly from the bank. There’s no risk of fraud or bounced checks when using a cashier’s check.
Another advantage of cashier’s checks is that they’re often accepted by businesses where personal checks aren’t. This is because businesses view cashier’s checks as being more secure.
Finally, cashier’s checks are a good option for large payments. If you’re buying a car or a house, for example, you might not be able to use your personal credit card to make the payment. In this case, a cashier’s check would be ideal.
Let’s take a look at the other side.
With a money order, the clearest benefit is that you don’t need access to a standard checking account. So, if you don’t have a bank account or your credit isn’t good enough to open one, this could be a viable option for you.
Another advantage of money orders is that they’re widely accepted. In fact, most places that accept checks will also accept money orders.
Finally, money orders are typically very cheap to purchase. You can usually get a money order for less than £0.50/$0.50.
What are the disadvantages of using Cashier’s Check and Money Order?
Now that we’ve looked at all the advantages, it’s time to take a look at some potential downsides to using each service.
Starting with cashier’s checks, the main disadvantage is that you need to have a bank account. This isn’t an issue for everyone, but if you don’t have a bank account, it’s not possible for you to get your hands on a cashier’s check.
Another downside of cashier’s checks is that they can take a while to clear. In some cases, it can take up to a week for the check to fully clear and the funds to show up in your account.
Finally, cashier’s checks can be more expensive than money orders. The cost will depend on your bank, but you can expect to pay around $15 for a cashier’s check.
Moving on to money orders, the first disadvantage is that they’re not as secure as cashier’s checks. This is because, as we mentioned before, the funds come from whoever purchased the money order in the first place. This means that there’s always a risk that someone could purchase a money order with fraudulent funds.
Another downside of money orders is that they can be tricky to cash. In some cases, you might need to go to the post office or a specific type of store in order to cash your money order.
Finally, money orders typically have a maximum value of $1,000. This means that they’re not ideal for large payments.
What is the difference between a cashier’s check and a money order?
The difference between a cashier’s check and a money order comes down to who the issuer is and the cost of each. While money orders are very cheap, cashier’s checks cost a lot more. This is usually offset by the fact that cashiers’ checks are for large amounts of money and money orders for smaller amounts.
Is a cashier’s check the same as cash?
No, a cashier’s check is not the same as cash. A cashier’s check is a type of check that’s issued by a bank and guaranteed by that bank. This means that the funds come directly from the bank, not whoever wrote the check. With cash, on the other hand, the funds are coming directly from whoever has the cash on hand. You can also use cash to pay for items in shops, restaurants, and anywhere else, whereas cashier checks are only accepted in certain situations.
Can you get scammed with a cashier’s check?
Yes, you can get scammed with a cashier’s check. While cashier’s checks are typically very secure, there is always the possibility that someone could write a fraudulent check. This could be done by creating a fake check or by altering an existing check.
If you’re ever unsure about a cashier’s check, it’s always best to take it to your bank and have them verify that it’s real. Some of the signs that could mean this include things like misspellings, poor print quality, or a lack of watermarks. Just make sure you’re taking and accepting cashier checks from banks and other people you absolutely trust. The bottom line is that both cashier’s checks and money orders can be useful in different situations. It really just depends on what you need to use it for. If you need to send a large amount of money, then a cashier’s check is the best choice.