Money order vs Cashier’s check: A cashier’s check is a type of check issued by banks to clients who hold accounts with them. Once a cashier’s check is issued, the bank usually assumes responsibility and would then act as a guarantor to the funds drawn by the purchaser. Money order, on the other hand, is a payment for a specified amount of money. It is a more trusted mode of payment as the funds are usually prepaid in the account. Below are the differences between the two:
What is the difference between Money order and Cashier`s Check?
- Cost: Money orders are considered less costly as they are readily available from the counter and any other financial institutions. Cashier’s check on the other hand is a bit costlier because it is not readily available and costs money.
- Place of purchase: Money orders can easily be accessed from various points such as Western Union points, supermarkets, post office and so on. A cashier’s check is not readily available because it is only provided by the bank and for one to enjoy one, he must be a holder of an account with the bank.
- Withdrawal of funds: Money order mostly deals with small amount of money such as petty cash which can be withdrawn anytime the owner wants to withdraw the money. Also he or she can withdraw the money or use the money order to purchase good from any business vendor while cashier’s check requires withdrawal of large amount of money and can only be withdrawn from the bank. There are several steps required when using a cashier’s check.
- Funds availability: Cashier’s checks are mainly used to withdraw large sums of money from the bank and the transactions may take hours or even one business day while a money order is used to withdraw smaller amounts of money and does not take a lot of time to process.
- The trust to the organization: Cashier’s checks are drawn against a bank and hence one is assured or guaranteed that his or her funds is in safe hands. Money orders on the other hand, are issued by third party organizations which negate the trust part of the transaction due to lack of guarantee.
- The maximum amount issued: The great difference between the cashier’s check and money order is the maximum cash limit. Money order have its maximum limits of around $700 and $1000 although the actual limit will depend on the issuer while for cashier’s check, there is a much greater limit as it is available for much larger amounts and therefore mainly used for high value transactions.
- Security: Cashier’s check is more secure than money order. This is because the cashier’s check is issued by banks and hence provides more security to the owner. The banks always ensure that their clients are safe and properties are kept safe. And since the bank acts as the guarantor, it is easier to trace any lost money or property when dealing with a cashier’s check. 8. Easiness of buying: For money order it is very easy and simple to purchase as it does not have many requirement or processes that should be fulfilled before the purchase unlike for the cashier’s check which is difficult to purchase as it has many procedures which must be fulfilled in order to get one.
- Replacement if lost: It is easier to replace a money order in case you lose it. This is however not the case when it comes to cashier’s check. The process and procedure for replacing a lost cashier’s check is more cumbersome and requires you to follow a long process. Once the replacement process has been initiated, it will equally take a longer time before an actual replacement is done.
- Alternative for payment: Many people prefer to be paid through a cashier’s check than money order especially when dealing with large amounts of money in transactions involving land, houses or vehicles. This is however different when dealing with money order which only processes limited amounts of money