A cashier’s check may work better for large purchases and may be a little more secure. However, they come with higher fees and require a bank account. On the other hand a money order is more accessible and may work better for smaller transactions due to their lower maximum limits and fees. The right choice will depend on your needs.
There are so many different financial products out there, such as bad credit loans, quick cash loans, installment loans, cashier’s checks, money orders, mortgages, and more. Sometimes it can feel overwhelming to learn what each of them is and how they work. Luckily, CreditNinja offers the information and support for when you need money fast. We always want to make sure that you make the right financial decision based on your situation.
What Is a Cashier’s Check?
A cashier’s check is similar to a regular paper check that you may be familiar with. The significant difference is that an average check associated with your bank account is drawn from that account. A cashier’s check, on the other hand, pulls the money from the bank’s funds. A teller or cashier will sign a cashier’s check at the bank, and the bank itself guarantees the funds.
At this point, you may be wondering, “why to use a cashier’s check instead of a debit card or regular check?” Well, that’s a great question! There are a couple of reasons you might choose to go with a cashier’s check.
- A cashier’s check is generally best for substantial purchases. Certain large purchases may not allow you to use a debit or credit card, like a home or vehicle. In these instances, it makes more sense to use a cashier’s check.
- Cashier’s checks also provide an added layer of security, making them less susceptible to fraud and theft. For example, many cashier’s checks will have security watermarks and require bank employee signatures. These extra security measures make them more secure than a regular paper check.
How Does a Cashier’s Check Work?
Now that you know what a cashier’s check is and what you might use it for, it’s time to review how to get one:
| Step | Description |
| 1. | Collect the appropriate information needed for the check. |
| 2. | Determine the precise amount for the check and obtain the recipient’s full name. |
| 3. | Request the check through your bank; you can do this online, over the phone, or in person at a branch. |
| 4. | Pay the total amount for the cashier’s check. |
| 5. | Request a receipt for the transaction to have proof of the transaction and help track the check and payment. |
Below is more information on each step:
- The first step will be to collect the appropriate information that you’ll need for the check. Next, find out precisely how much the check should be for and the recipient’s full name.
- The next step will be to reach out to your bank. If you don’t have a bank, there may be certain branches or even credit unions that can still help you. If you do have a bank, you can sometimes request a cashier’s check online or over the phone. But the fastest way to get the check would be to visit a branch of your bank in person.
- Once you request the check, you’ll need to pay the total amount. Typically, the fee for a cashier’s check ranges from $5 to $20.1 Some banks and other financial institutions might offer cashier’s checks for free to their premium or long-standing customers.
- If you have a bank account with them, the funds will likely be withdrawn from that account. So be sure that you have enough funds in your account to cover the entire check plus any applicable fees. If you don’t have an account with the bank providing the check, you’ll likely have to pay them in cash for the check.
- The last step would be to request a receipt for the transaction. It’s always good to have proof of the transaction. Having a receipt could also help you to track the check and payment.
What Is a Money Order?
While a money order does share some similarities to personal check and a cashier’s check, there are a few distinct differences.
A money order is a type of paper payment, just like a cashier’s check and a personal check. The most significant distinction between personal checks and one of these options is that a customer purchases a money order ahead of time for the exact amount they’re sending. Because the sender pays for the amount before sending it, the amount they’re sending are guaranteed funds and can’t bounce like a personal check.
A money order is a very secure way of sending money to someone. Just like with a cashier’s check, you’ll need to provide the name of the person receiving it and the exact amount. However, because you pay for the money order upfront and it includes the specific amount and recipient, they tend to be safer than personal checks and some forms of digital payments.
Many people choose to use a money order because they don’t have a bank account or any way of sending a large amount of cash to someone else. If you aren’t a part of a bank or credit union, a money order may be a good option for safely sending money that you owe. Another thing you should know is that money orders do not expire.
How Does a Money Order Work?
Getting a money order is as simple as finding an establishment that offers them and purchasing one. You can buy a money order through post offices, certain retail banks, credit unions, specific retailers like grocery stores, convenience stores, or even pharmacies, as well as check cashing and payday establishments.
Money orders will also have a fee that you’ll need to pay for using the service. This fee can be anywhere from a dollar up to a few dollars, depending on the specific establishment. For instance, the USPS charges $1.30 for money orders under $500 and $1.75 to send money via money orders over $500.
Many places will also put limits on the amount you can send using a money order. For example, the USPS won’t allow money orders over $1,000. So keep this in mind when considering a money order.
How To Get The Money From Cashier’s Checks and Money Orders Into Your Bank Account
Now that you’re an expert on sending money orders and cashier’s checks, you may be wondering what to do if you’re the recipient of one. Luckily, this is the easy part.
If you have a checking or savings account with a bank or credit union, it will be very easy to deposit either option.
You can likely use the same process that you would for a traditional paper check or a paycheck from your employer. This means you can visit a local branch of your bank and deposit the money into your checking account or savings account. Many banks will also allow you to deposit funds into your checking account through a mobile deposit. This would probably require online or mobile banking.
FAQs: Money Order vs. Cashier’s Check
For money orders, refunds are possible if the money order hasn’t been cashed. You’ll need to return to the place of purchase with your receipt and request a refund. For cashier’s checks, cancellation can be more complex. You typically need to go to the issuing bank and may have to wait a certain period before the check can be canceled and refunded.
If your money order is lost or stolen, report it immediately to the issuer. You may be able to get a replacement if you have the receipt and serial number. For a stolen or lost check, contact the issuing bank as soon as possible to discuss potential replacement options. You might need to complete an indemnity form and wait a specified period for re-issuance.
To prevent scams, always buy money orders and cashier’s checks from reputable sources. Be wary of accepting these from strangers, especially in transactions where authenticity is hard to verify. If you’re unsure, verify the money order or cashier’s check with the issuing institution. Avoid sending these to people you don’t know or in response to offers that seem too good to be true.
Money orders are widely accessible, don’t require a checking account, and offer a secure way to send guaranteed funds. Cons: They have a limit on the maximum amount, can incur a fee, and may be less convenient than digital payment methods.
Cashier’s checks are secure, typically for larger amounts than money orders, and are backed by the issuing bank, making them a trusted form of payment for big transactions. Cons: They can be more expensive than money orders, require a bank account to issue, and can be inconvenient to obtain as you need to visit a bank.
Both are generally safe, but cashier’s checks are often considered more secure due to the involvement of the bank and the additional verification processes. However, both can be subject to fraud, so it’s important to handle them with care and verify their authenticity when necessary.
Stopping payment on a money order can be challenging and often not possible once it’s been cashed. For cashier’s checks, stopping payment may be possible in certain circumstances, but it typically involves a complex process and may not always be feasible, especially if the check has already been cleared.
Money orders can be purchased at various locations, including post offices (post offices are a very common option), grocery stores, and some financial institutions. Most of these establishments accept payment for money orders through cash, debit card, or other forms of direct payment.
On the other hand, cashier’s checks are typically obtained from banks or credit unions. To get a cashier’s check, you usually need to have an account with the bank or credit union, and they often accept payment through withdrawing funds directly from your checking account. It’s important to note that while purchasing a money order is straightforward and available to those without an account, cashier’s checks require a checking account and are generally used for larger transactions.
Cashier’s Checks and Money Orders: The Bottom Line With CreditNinja
If you’re debating cashier’s checks and money orders, there are a few things that may help you decide. First, make sure to consider the reason for the payment, as cashier’s checks and money orders are often sent for different reasons.
First, whether or not you have a bank account with a financial institution will play a large part in your choice. If you do have an account with a bank and you need a money order or cashier’s check, then you may opt for a cashier’s check from your bank.
If you don’t have an account, but you need cashier’s checks or money orders, then you only have a couple of options
- Find a credit union, bank, or financial institution that offers them to non-members
- Use the USPS, check cashing establishments, or convenience stores to order one.
Both cashier’s checks and money orders offer a safe and secure way to send and receive money. While a cashier’s check is usually used for a large purchase, money orders are often used to send money to people when the sender doesn’t have a bank. Often, a money order is better for sending money to an individual, as many companies may not accept them for large purchases.
CreditNinja wants to emphasize that choosing between cashier’s checks and money orders will depend on your specific situation and which one is available to you as the sender.
References:
- What is a cashier’s check | USA Today
- What Is A Money Order And How Does It Work? | Forbes Advisor
- What Is a Cashier’s Check? Definition, Cost, Use and How to Buy One | NerdWallet
