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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: 27 July 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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