NEW YORK, February 2, 2023 (Newswire.com) - iQuanti: Cashier's checks and money orders are certified funds — payment guaranteed to clear when you use it. You can pay for the cashier's check or money order ahead of time and get a piece of paper representing the payment. You then pay with the cashier's check or money order. Then, the company that sold you the cashier's check or money order transfers the money. Doing this prevents bounced checks and insufficient funds since you already paid.
All that said, cashier's checks and money orders differ in several ways. These differences make each one suitable for distinct situations. This article will compare a cashier's check vs. money order by defining each and looking at their benefits and drawbacks.
How do cashier's checks work?
Cashier's checks are a type of official check issued by banks and credit unions. When you buy a cashier's check, the institution draws funds from your savings or checking account to cover the amount plus the issuing fee and then signs and issues you a check. You can then use the cashier's check for your purchase.
Pro: Available in large amounts
Policies differ between banks, but cashier's checks generally don't have a limit on the amount you can get one for. As a result, cashier's checks can often be used for larger purchases.
Pro: More secure
In general, cashier's checks are considered to be more secure than money orders. They are offered only by banks and are used for large purchases, so they come with additional security features to guard against fraud.
Con: Only available at banks and credit unions
You can get cashier's checks at banks and credit unions, but you also must have an account with that bank or credit union to do so. You can visit a bank branch to get a cashier's check or go on their online website to order one.
Con: More expensive
Many banks sell cashier's checks for no lower than $10. Some may sell them for even more. This is a substantial fee simply for accessing your money, so make sure you must use a cashier's check for the specific expense.
How do money orders work?
Money orders are another form of certified payment available at banks and credit unions, but also supermarkets, convenience stores, and several other locations. You can purchase a money order by paying the amount you want plus an issuing fee with cash, debit card, or traveler's check. You generally can't use credit cards since those are forms of debt. If you do, it may be treated as a cash advance. Upon purchase, the issuer hands you a check representing that money order. When you pay someone with the money order, the issuer transfers funds to the payee.
Pro: Widespread availability
Money orders are sold at many locations that you might visit regularly. Some places you can purchase a money order include:
- Western Union
- Banks/credit unions
- Convenience stores
- Gas stations
- Post offices
Money orders tend to cost no more than $2 to $3. This makes them more affordable than cashier's checks. Plus, since they're available at more locations, you have more room to compare costs and find the cheapest money order provider.
Con: Lower limits
Money orders are generally available for up to $1,000. Many money order providers won't let you purchase a money order larger than this. For larger purchases, you'll have to buy multiple money orders and pay the fee each time.
Con: Must be bought in person
Money order issuers must verify your identity, which can be hard to do over the Internet. So, keep in mind that money orders are rarely, if ever, available online. On the other hand, cashier's checks are only available at banks and credit unions, but you can often buy them online since you'll have a bank account with the bank already.
The bottom line
Both cashier's checks and money orders are certified funds. Each one's specific features suit them for different situations. Cashier's checks generally offer large amounts and higher security but cost more and are only available at banks and credit unions. So, cashier's checks can be excellent tools for putting a down payment on a home or car.
Meanwhile, money orders are cheaper and available at numerous locations. However, they're only available for up to $1,000 in most cases. As a result, money orders can be helpful for paying bills or placing a deposit on an apartment. Make sure to weigh these features against your specific expense to decide whether a cashier's check or money order fits your needs best.Contact Information:
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Original Source: Cashier's Check vs. Money Order: Pros and Cons
Lifestyle - RSV News originally published at Lifestyle - RSV News