What is the difference between a money order and a cashier’s check?

An international money order in US dollars (USD) issued by the United States Postal Service.

Understanding the similarities and differences between a money order and a cashier’s check is very important when conducting business. The main difference between a money order and a cashier’s check is that a cashier’s check uses bank funds and is signed by the bank or cashier, whereas the money order can be issued by a variety of sources such as a bank, grocery store , US Postal Service and US Western Union. While a money order and cashier’s check are guaranteed, purchasing a cashier’s check often costs more. The main similarity between a money order and a cashier’s check is that the funds are guaranteed.

Bank checks are drawn from an individual’s personal funds.

Both a money order and a cashier’s check are preferable to a personal check because they both guarantee that there will be payment for the goods or goods being shipped or purchased. With a money order, payment is issued by one of several sources, such as a bank or post office. As a result, the person who expects the money is sure that he will receive it. With cashier’s check, the bank actually takes responsibility for paying the person selling the goods, but this usually happens after the bank has withdrawn the money from the buyer’s account. The exchange usually happens instantly, so the bank withdraws the money from the buyer’s account at the same time it sends the money to the seller.

Small retail stores may not accept bank checks as a form of payment.

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

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Only banks can issue bank checks, but money orders can be purchased from many places, such as some supermarkets and the post office.

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

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