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What Is the Difference Between A Money Order and a Cashier's Check?

Cashier's checks draw from an individual's personal funds.
An international money order in US Dollars (USD) issued by the United States Postal Service.
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  • Written By: Dee S.
  • Edited By: Jenn Walker
  • Images By: Fotopak, Dvortygirl
  • Last Modified Date: 24 November 2014
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Understanding the similarities and differences between a money order and a cashier’s check is quite important when conducting business. They main difference between a money order and a cashier’s check is that a cashier’s check uses the funds of the bank and is signed by the bank or the cashier, while the money order can be issued by a variety of sources, such as a bank, grocery store, the United States Post Office, and the United States Western Union. Although both a money order and a cashier’s check are secured, a cashier’s check generally costs more to purchase. The main similarity between a money order and a cashier’s check is that the funds are guaranteed.

Both a money order and a cashier’s check are preferred over a personal check because both guarantee there will be payment for the products or goods being shipped or purchased. With a money order, the payment is issued by one of many sources, such as a bank or a post office. As a result, the person expecting the money is sure that she will receive it. With a cashier’s check, the bank actually takes on the responsibility of paying the person selling the products, but this usually happens after the bank takes the money from the buyer’s bank account. The exchange usually happens instantly, so the bank removes the money from the buyer’s account at the same instant it sends money to the seller.

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Generally, a money order and cashier’s check cost money to purchase. In most cases, the fee associated with a cashier’s check is larger than that of the money order unless a bank specifically has lower fees for their customers. In addition, a person must have a bank account with the bank issuing the cashier’s check. So, a person without a bank account must use a money order to make a payment since it can be issued by a non-bank entity.

Typically, both a money order and a cashier’s check can be verified by the issuing entity without exerting much time or effort. Verifying the check number and amount with the issuing entity is a great way to prevent fraud. In addition, a money order becomes more tedious if the purchase amount is large. In those cases, identification with a photo may be necessary, making a cashier’s check a better option. Regardless, either a money order or a cashier’s check is a better choice for the seller than a personal check because they both guarantee the payment of funds.

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Lostnfound
Post 2

I can get a money order at Wal-Mart for 70 cents. I pay my rent that way all the time. I get a receipt with it, and it comes out of my account right then.

My landlady is kind of absent-minded and has waited for two or three weeks to cash a rent check before. Even if you're making allowances for the money to come out of your account, it still messes with your bookkeeping. (Makes me wonder how much she really needs the rent money, too.)

So, for an extra 70 cents, I know the money is out of my account, and if she loses the money order, that's on her. She's lost checks before, but hasn't managed to lose the money orders yet.

Grivusangel
Post 1

I was accidentally overpaid by my contracting company, so I sent them the difference via cashier's check. It cost more, but I was mailing it, so I wanted to make sure the check was actually made out to the company and was guaranteed.

I think the $13 fee I paid was a little (OK -- a lot) steep, but it did mean the money was guaranteed, and it would have been a lot harder to cash that cashier's check if it had been lost or stolen than a money order. Also, a cashier's check is easier to trace. The bank could have put a trace on the check and busted the thieves as soon as they cashed it, if it had been lost in the mail. It arrived safely, and I had a little more peace of mind using it.

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