Here we help break down the difference between a money order and a cashier’s check so you can make the right decision for your finances, whether you are buying a new home or sending your kid sister birthday money. Also: What is a cashier’s check? Definition, cost, uses, and how to get one It does function like a check in some ways, though. The payee is the person that receives the funds, while the payer has the opportunity to stop payment if needed. Anyone can get a money order, regardless of whether there is an open account or not. Because it is issued directly by a bank, a cashier’s check is issued and signed by a bank’s teller or cashier, making it official. This is why it is a popular choice for larger payments because it is significantly safer than cash and is accepted instead of a check payment by most people.
Pros and cons of a money order
A money order is a great option when you need to make smaller purchases. Because it is a smaller amount, it is often cheaper than the cost of a cashier’s check and usually does not require a new account. Just be sure that you can keep the total amount under $1,000 and account for any fees you may encounter. You also want to keep track of the transaction, safely storing the receipt until everything is completed because it is otherwise untraceable.
Pros and cons of a cashier’s check
A cashier’s check may require opening a new banking account; a money order may be your best bet because there are rarely new account requirements.
Guaranteed by customerAppropriate for small purchasesTypically cheaper than a cashier’s checkGenerally accepted worldwide
Guaranteed by bankAvailable in large amountsMay clear faster Advanced security protocols
$1,000 maximumProne to feesUntraceable after purchase
May require new banking accountOften cannot be canceledTypically more expensive than a money order
A money order works differently. With its $1,000 requirement, a money order is a great solution to a number of scenarios. Because it is limited in its amount, it is ideal for your monthly rent or the deposit for a used car. It is also often used to send money to friends and family or to make small purchases. Discrete and private, a money order is an excellent solution for those without a bank account. It is a great way to keep your private information secure by skipping the personal check with all of your account numbers on it. Either way, both are crucial financial tools that will no doubt come in handy in many a lifetime.
