Cashier check and money order are physical instruments used to transfer funds from one party to another by personally handing them, sending via postal/courier service and clearing them through bank accounts for local and foreign currencies. You incur lower cost by using these instruments but may be slower in speed of delivery as compare to other forms of fund transfer methods. Note that postal order and money order are usually issued by postal services. For faster remittance but at higher cost, you use telegraphic transfers like Western Union or banks. Besides commission for the service, you also need to pay the cable charges. You can send funds in local or foreign currencies.
What Is Money Order?
A money order is an an official document that you buy in a post office or a bank and send to someone so that they can exchange it for money in a bank. It is a “safe, convenient, and economical alternative to sending cash through the mail.” Money orders are issued by governments (usually through postal authorities), banks, and other institutions to purchasers who pay a service fee in addition to the face amount of the money order. They are payable on demand in cash, they are a generally accepted means of payment.
What Is Cashier’s Cheque?
A Cashier’s cheque is a cheque which cannot bounce because its face value is paid to the bank when it is issued, and the bank then assumes the obligation. In other words, Cashier’s Check is a check guaranteed by a bank. The check is issued by the authorized officer of a bank and made payable to a third party. A customers who purchases a cashier’s check pays for the full face value of the check and usually also pays a small premium for the service. These checks are secured by the funds of the issuer – usually a bank – and include the name of a payee (the entity to which the check is payable), and the name of the remitter (the entity that paid for the check).
Difference Between Money Order And Cashier’s Cheque
- A money order is a pre-paid financial instrument. A cashiers check is a check guaranteed by the bank.
- Cashier’s checks are available for purchase only through a bank or other financial institution. Money orders are available at both financial and non-financial institutions.
- Fees associated with cashier’s checks vary by financial institution and can be expensive. Money orders are typically cheaper, with either a flat fee or a percentage of the total value.
- Money orders do not expire and can be cashed at any time. Cashier’s checks typically hold an expiration date determined by the issuing institution.
- Cashier’s checks are guaranteed by the issuing bank. Money orders can be canceled, so the funds may not always be guaranteed.
- Money orders are typically used for smaller amounts, while cashier’s checks are used for larger amounts.