Some transactions require guaranteed funds, which means you cannot use a personal check.
Both cashier’s checks and money orders can be used in similar situations; however, there are some key differences between both that you need to know before you use a cashier’s check or money order.
A money order is a paid paper form of payment to send money or exchange for cash, and it cannot bounce like a cashier’s check. A cashier’s check is issued by your bank or a credit union and can bounce if your fund is insufficient.
They both are safer ways to pay than a personal check and are backed by third parties, so the payee is guaranteed to get paid.
Generally, a cashier’s check is safer than a money order because a cashier’s check is issued by the bank and the “pay to” is filled at the time when you receive it. On the other hand, a money order’s “pay to” is blank so if you forgot to fill it out, it can be cashed by anyone.
Money orders cost a few dollars and you can get them from most stores and even the Post Office, while cashier’s checks are issued from a bank and usually require a bank account.
However, cashier’s checks can be used for larger payments like a down payment on a house, and money orders are typically for smaller amounts, like paying rent.
Money orders are typically easier to get, but cashier’s checks are more secure.
A bank representative will sign a cashier’s check and the funds come from the bank itself. Only banks can issue and sign a cashier’s check. Cashier’s checks are a great option to make large payments and are more secure than carrying around large amounts of cash.
Money orders are also easier to replace than cashier’s checks; all you have to do is return with your receipt to where you purchased it and ask for a replacement.
However, any type of check is going to be more secure than using cash. Money orders and cashier’s checks don’t contain your bank account information or personal details, so they are safe for use in the mail, paying bills, and sending large payments.
Money orders and cashier’s checks are great for making larger purchases and for payments that need to be backed by a third party, but when making everyday payments, you are probably still best off to use debit or credit cards. Here’s everything you need to know about getting a money order or cashier’s check.
- Money orders are cheaper, and easier to get than cashier’s checks. However, they’re best for purchases under $1,000 while cashier’s checks have no limit.
- You will most likely need a bank account or credit union account to get a cashier’s check.
- Cashier’s checks are generally used for large payments like a house down payment, car, or boat purchase.
- Walmart is the cheapest place to get a money order, and they have a limit of $1,000.
- The best place to get a cashier’s check is from your bank.
|Cashier’s Check||Money Order||Personal Check|
|Where to get it||Banks||Banks, U.S. Post office, convenience and drug stores, grocery stores||Banks|
|Cost*||$5 – $10||$1 to $5||~$0.30 per check|
|Dollar limit*||N/A||$700 – $1,000||Whatever is in your account|
|How quickly funds are available*||Almost immediately||Almost Immediately||2-7 days|
|Payment method*||Bank account, Debit Card, Cash||Bank account, Debit Card, Cash, Personal Check, sometimes Credit Card||Bank account|
*Note that exact numbers and availability depend on where you purchase the cashier’s check or money order.
Who Is A Money Order For?
Like cashier’s checks, money orders are safer payment forms than personal checks. However, if you don’t have a bank account, then a money order is the best option for you.
Since money orders are less expensive, they are great for smaller payments or when you cannot use a personal check.
For instance, you may want to use a money order for the following purchases:
- Utility bills
- Lending money
- Sending money to others
Who Is A Cashier’s Check For?
Cashier’s checks are best for those who have a bank account at a bank that offers cashier’s checks. They also are more secure than writing a personal check, so if you are making a transaction and need guaranteed funds, then a cashier’s check is for you.
Cashier’s checks are especially great for people who have a lot of cash flow through their accounts and need to avoid overdraft fees or insufficient funds fees.
Additionally, since the funds come out of the bank’s account, and the bank has already pulled money from your account, when someone goes to cash or deposit a cashier’s check it is available almost immediately. This makes cashier’s checks good for when you need funds available right away.
Cashier’s checks are best for making large payments like the following:
- Home down payment
- Land purchase
Average Cost of a Money Order
The average cost of a money order is $1 – $3. There are only two main providers for money orders, and they are Money Gram and Western Union.
However, many retailers and supermarkets sell either Money Gram or Western Union money orders. some places charge a lot more for money orders than the average, so knowing where to go you can save money on any money order purchase.
Walmart has some of the cheapest money orders – and you can purchase one from their customer service desk in the front of the store. They charge only $0.88, and their maximum is $1,000.
You will need a valid form of government photo ID. Plus, if you have a money order to cash out, you can go to Walmart and get it done for about $3 to $6.
7-Eleven money orders are also extremely cheap, for a minimum of $0.65 fee; however, the fee is 1-3% of the cost of the money order so it can get expensive the more you put on the order. Also, 7-Eleven only offers a $500 maximum on your order.
For average priced money orders, the U.S. Postal Service charges just over $1, up to $1.76 depending on the location and amount on the money order.
Banks are the most expensive place to get a money order and will typically charge $5.
|7-Eleven||$0.65 minimum (1-3% of the money order)||$500|
|K-Mart||$0.69 – $1.25||$500|
|Kroger||$0.70||$500 – $1000 (location dependent)|
|Post Office (USPS)||$1.20 – $1.65||$1000|
|Local bank or credit union||$5||$1000|
Average Cost of a Cashier’s Check
The average cost of a cashier’s check is from $6 to $10. That is definitely much more than a money order, which costs under $5.
You can get a cashier’s check from either a bank, credit union or ordering one online. Most banks and credit unions will require you to have an account there to get a cashier’s check, but some are flexible. However, if you don’t have an account there, they may require you to bring cash to cover it.
The cheapest place to get a cashier’s check will most likely be your local bank where you have an account.
Out of top U.S. banks, the cheapest one for a cashier’s check is Citizens Bank, which only charges $3. However, Chase, U.S. Bank, TD Bank, KeyBank, and Regions Bank all charge $8.
The most expensive bank to get a cashier’s check is Fifth Third Bank; they charge $10.75.
Money Order Limit
Since money orders are backed by a third party, the limit is set individually by each. Typically, the limit is around $700 to $1,000. If you need to make a payment of over $1,000 with a money order, you will have to do it in separate money orders.
However, there may be a limit to how many money orders you can get at one time, depending on where you go. For instance, USPS has a daily limit of $10,000 in money orders (of 10, $1000 orders).
Your best bet for purchases over $1,000 is to use a cashier’s check, rather than a money order.
Cashier Check Limit
Cashier’s checks typically do not have a limit, as they are designed for larger payments.
For example, you might use a cashier’s check for a down payment on a house. Down payments are on average about 10% of the overall price of the home. So, for a $350,000 home, a down payment is on average $35,000.
That’s not something you can easily pay with cash! Especially if you’re making a purchase from out of state, you want to make sure that all that money gets to where it needs to go safely and securely.
Cashier’s checks solve this problem because they are backed by a bank and don’t contain your account information.
You still shouldn’t lose a cashier’s check, but if you do, it’s not as damaging as losing $35,000 in cash.
How To Get Money Order
You can use cash, a debit card or a traveler’s check to purchase a money order. But most places will not allow you to pay with a credit card or personal check.
Here’s how to get a money order at Walmart (we’re using Walmart since they’re the best deal on money orders):
- Gather information on the amount of the money order and your form of payment and a photo ID.
- Go to your local Walmart Supercenter or Neighborhood Market Customer Service Desk.
- Ask the attendant for a money order and provide the necessary information.
- Pay the $1 fee with cash or a debit card.
How To Get Cashier’s Check
How a cashier’s check works is that the bank will withdraw funds from your checking or savings account for the amount of your cashier’s check. The bank puts your money in their own account, from which they will pay whoever cashes the check. You can also pay in cash, and the bank will still put your money in their account to pay the check payee.
To get a cashier’s check from your bank or credit union:
- Gather information such as the name of the payee, check amount, and your government picture ID. Also, make sure you know which account you will pay from and that the account has sufficient funds for the check.
- Go to a bank teller and ask for a cashier’s check. They will ask for the information you gathered in step one.
- Pay the fee. For most banks, the cashier’s check fee is about $10, but it varies depending on your branch. If you have a premium account with your bank, you may have free cashier’s checks included. Ask the teller or speak with customer service to find out.
To get a cashier’s check if you don’t have a bank or credit union account:
- Search for a local bank or credit union that doesn’t require you to have an account there to get a cashier’s check. They may require it in which case you would have to open an account to get a cashier’s check.
- Gather information such as the name of the payee, check amount, and your government picture ID.
- Go to a bank teller and ask for a cashier’s check. They will ask for the information you gathered in step one and for your payment method.
- Pay the fee. For most banks, the cashier’s check fee is about $10, but it varies depending on your branch.
Common Scams of Money Orders and Cashier’s Checks
Scammers will try to create fake money orders and cashier’s checks, so you should beware when you are purchasing these types of documents. Always make sure to purchase cashier’s checks and money orders from reputable vendors and keep them in secure places so you don’t misplace them.
Additionally, you should always keep your receipts for money orders and cashier’s checks so that you have a record of your purchase.
You can also keep a money order secure by filling out every field with black ink, making sure not to leave anything blank. When delivering a money order or cashier’s check, it’s best to deliver it in person or mail it.
If you receive a cashier’s check or money order from someone, you should verify that it is valid with the bank before trying to deposit it or cash it. They can be easily forged so you must be wary when accepting money orders and cashier’s checks.