To pay for a money order, you will usually need cash or a debit card. Some issuers will make the claim that you can, but what’s probably happening is that you’re using your credit card to take a cash advance. For example, if you’re purchasing a car from a private seller, they may require payment with a cashier’s check to ensure the funds are available. In this case, you would follow the steps above to obtain a cashier’s check from your bank, and then deliver it to the seller once it’s been issued.
If the money order hasn’t been cashed, a replacement or refund may be issued. Money orders are inexpensive ranging in price from less than $1 up to $10. Retail and grocery stores generally have the lowest prices and banks the highest. However, some banks may waive the cost for account holders who meet certain criteria like maintaining a minimum account balance.
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Landlords often prefer them for security deposits due to their guaranteed funds. For large or trusted payments, especially with a reliable check cashing service, a cashier’s check is a smart choice. If a cashier’s check or money order is lost, stolen, or goes uncashed, it’s important to know how to trace and possibly cancel the payment.
A money order is a payment method that allows individuals to pay for goods or services without needing a traditional bank account. It is a prepaid, negotiable instrument issued by a third party, usually a post office, bank, or retail establishment. To obtain a money order, you pay the issuer the amount you want to send, plus a nominal fee for the order itself. A cashier’s check is a check that takes money out of a bank’s funds rather than from a personal bank account.
A money order is similar to a personal check, except that the money is “guaranteed” since you have to buy it. You can purchase a money order at your bank, credit union, post office, some retailers such as grocery stores, and check-cashing facilities. Typically, you can only purchase a money order up to $1,000 and will need to pay for one in cash or with your debit card.
Differences between a cashier’s check vs. money order
Be sure to weigh the pros and cons carefully before deciding which payment method is right for you. On the other hand, money orders are an appropriate solution for smaller payments – say, paying your rent or buying a certain service. For example, when you are paying your visa fees, the most common option is a money order. The main difference between the two is that while one does not have a limit (cashier’s checks), the other cannot go any higher than $1,000.
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Make sure to do your own search and not rely on the information on the check itself. The institution should be able to help you verify whether the cashier’s check is genuine. Cashier’s checks are typically more expensive than money orders, which makes sense if you consider the differences listed above—cashier’s checks are a more robust instrument. They’re also issued by banks, which don’t have a low-cost reputation, unlike mass retailers who sell money orders for $1.
I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more. Choose a money transfer platform like Wise for a simple digital solution. Send your money around the globe with just the touch of a button. A money order can also be difficult to track, so you may not know exactly when your recipient cashes it.
- However, they differ on when to use them, their cost, and where they can be purchased.
- You’ll need to provide valid identification like a driver’s license or passport.
- Understanding the differences between cashier’s checks and money orders can help you figure out which option makes sense for your situation.
- For example, when you are paying your visa fees, the most common option is a money order.
Cashier’s Checks Offer Strength and Security
Money orders are available in many places and are easily accessible to everyone. You can buy one at many grocery and chain retail stores, drug stores, and some convenience stores. Stores that sell money orders typically have a MoneyGram or Western Union logo posted somewhere. When verifying a money order, call the number at the bottom or look up the company online to find their phone number and call to verify. Money orders are used much more often in scams than cashier’s checks, so it’s cashier’s check vs. money order always a good idea to verify before you deposit it to your account. After getting confirmation that it’s legitimate, deposit to your money order to your account.
That’s because it’s paid up front and can’t bounce due to lack of funds in the corresponding account. And cashier’s checks don’t show any of your personal account information. However, you’ll likely have to be an account holder at the bank or credit union to request a cashier’s check. You can typically purchase a cashier’s check at a branch or online. However, they aren’t guaranteed by a bank, so you can purchase them without a bank account.
- Money orders are useful when a reliable and guaranteed form of payment is necessary, such as rent payments.
- While both are considered a secure method of payment, there are specific situations where one may be more appropriate than the other.
- It’s a scenario famously exploited in check-kiting schemes that rocked some US banks in the 1990s.
You may even find banks that offer cashier’s checks with no upper limits, although some banks will only go up to $250,000 per check. If you are making a more expensive purchase like a new car or a down payment on a house, a cashier’s check may be the best option. Money orders, meanwhile, cater to unbanked users, gig workers, or anyone seeking anonymity. For instance, a tenant without a checking account might buy a money order at Walmart to pay rent.
Differences Between Cashier’s Checks and Money Orders
Plus, you can typically use the receipt to track the money order. If for some reason, you can’t use a money order, a prepaid debit card is an alternative. These can often be purchased at grocery, retail, and drug stores.
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While money orders are more convenient and cost-effective for smaller purchases, cashier’s checks are more secure for larger purchases at a slightly higher cost. Although both payment methods are widely accepted, that does not mean that all businesses and individuals will accept them. Always verify that your preferred form of payment will be accepted before you attempt to use it. Cashier’s checks and money orders offer a more secure way to make a payment than cash or personal check. A cashier’s check is better suited to larger transactions, though it may come with a higher fee. Money orders may have limits on the dollar amount, but they come with low fees and are widely available.