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Cashier’s Check vs. Money Order: What to Know

Reginald Calaguas, Senior Private Banker, First Republic Bank
January 7, 2022

  • Cashier’s checks and money orders both allow you to send money more securely than writing a personal check. 
  • Money orders allow buyers to send up to $1,000 securely for minimal fees, making them ideal for sending smaller payments. 
  • Cashier’s checks can be used to send payments of any sizes, making them the preferable choice for very large payments, such as the down payment on a home. 

Consumers looking for an alternative to personal checks have several options available to them. One option is a money order, a certificate that allows the receiver to access cash on demand. They’re low cost and convenient to purchase, offering a streamlined way to send up to $1,000. Another option is a cashier’s check, also known as an "official check", which is written by a financial institution using the bank’s own funds. It’s a secure way to send larger payments, as there’s no limit to the monetary value of a cashier’s check. 

Both payment types are designed to ensure enough money is available to cover a payment, but several differences distinguish the two. Understanding these differences, as well as the benefits and drawbacks of each payment type, will help you make a more informed decision as to which one to use. 

When evaluating whether to use a money order or cashier’s check, consider the following:

 

Cashier’s Check

Money Order

Uses

Ideal for securely making large payments, such as the down payment on a home 

Ideal for sending payments up to $1,000

Cost

Typically more expensive than money orders. Fees generally vary between $10 and $15

Often less expensive than cashier’s checks. Fees vary depending on the size and type of money order, but start at under a dollar at some retailers 

How to Get Them

Available from a bank, credit union or other financial institution

Available at banks, credit unions, post offices, grocery stores, big box stores and convenience stores

Safety

More secure than money orders or personal checks, as the bank guarantees the payee can access the full value of the check

Less secure than cashier’s checks, but more secure than personal checks. If lost, they're fairly easy to replace

 

When to use a cashier’s check

A cashier’s check is designed to securely send large payments. It may be the ideal solution when you require a payment method that’s more reliable and secure than a personal check and either desire more security than a money order or need to make a payment larger than $1,000. The bank immediately debits the funds used for the cashier’s checks from the client’s account.

Consumers often use cashier’s checks to:

  • Cover larger purchases like a down payment on a home, a security deposit or tax payment

  • Have a check backed by a bank credit union or other financial institution

  • Receive a large lump sum of money, such as the payout from lawsuit settlement

When to use a money order

A money order allows consumers to securely send money that the payee can convert to cash on demand. Security is one key difference between a money order and a check written from your own account, and a money order may be the ideal option to more safely send smaller payments with minimal fees compared to a cashier's check. 

Consumers often use money orders to:

  • Cover expenses and send payments less than $1,000
  • Send money internationally or through the postal service with international money orders (it is important to note that traveler's cheques are a different form of payment and are used when traveling overseas.)
  • Provide a payment option for travelers that doesn’t require using a bank account. Money orders can be created in one country and cashed in another 
  • Send money without a checking account or a savings account

Additional considerations for cashier’s checks vs. money orders

Consumers should consider several factors before choosing between cashier’s checks and money orders, including:

How much does each cost?

Both money orders and cashier’s checks come with fees. When purchasing a cashier’s check or money order, the buyer will need to pay the full amount of the check or order, along with the associated fees. If you’re getting a cashier's check, the money will be moved from your bank account to an account owned by the financial institution, who will ultimately release the funds to your payee. 

The fees for a money order or cashier’s check may vary depending on which issuer you choose. However, cashier’s checks typically cost more — $10 to $15 — than money orders, which may cost under a dollar in some cases. 

Which is easier to get?

Obtaining a money order may be more convenient than getting a cashier’s check, since you can purchase money orders at financial institutions, the U.S. postal service (USPS), grocery stores, convenience stores and more. Cashier’s checks must be obtained at the issuing bank or financial institution. They are also not as easy to replace. The replacement period for a replacement cashier check is usually 90 days or greater.

Are both options secure?

For both options, the payee can be assured they can access the agreed-upon payment (meaning it won't bounce back), and neither payment method provides the payee with your bank account number. Cashier’s checks offer yet another layer of security, since they often contain added security features to prevent fraud. 

However, both money order and cashier’s check scams exist, and it’s important to protect your money. Always keep a record, such as a receipt, of any money orders or cashier’s checks you purchase, and be aware of the risks associated with all payment options. 

Final thoughts

Both cashier’s checks and money orders can help you send money more securely than you could with a personal check. Money orders are ideal for sending smaller payments, up to $1,000, while also minimizing fees. Cashier’s checks, while associated with higher fees, may be the right choice to send payments larger than $1,000, or payments that require more security than money orders provide. 

No matter which method you ultimately choose, comparing the payment options available to you, such as the common types of checks, can help you make more informed financial decisions about which one best suits your situation and goals.

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