Difference Between Cashiers Check & Money Order
A cashier's check or money order may be used in lieu of a personal check. However, there are differences between money orders and cashier's checks that affect the payor and payee.
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Locations
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A money order can be obtained at a variety of locations, including financial institutions, supermarkets and other businesses or organizations. A cashier's check can be obtained only from a financial institution. Money is removed from the payor's personal account and placed in the bank's account before the check is cashed by the person receiving it.
Monetary Amounts
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Many lending institutions cap the amount of money they will allow to be drawn on a money order; it is often limited to $1,000. A bank will draft a cashier's check for any amount. Fees for money orders depend on the institution and the face value of the money order. They are typically less than $2, whereas cashier's checks typically cost $5.
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Payment Security
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A cashier's check is guaranteed by the bank because the check is actually drawn on the bank's account. In contrast, a money order works more like a single-use checking account. The money order is safer than a personal check because it is backed by the business rather than the individual.
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