Should I Get a Cashier’s Check or a Money Order?
LOS ANGELES - October 5, 2021 - ( Newswire.com )
iQuanti: When you need to quickly and securely transfer funds to someone, like putting down a security deposit on a new place or sending money to a friend, forking over cash may not be the best option. Money orders and cashier’s checks are two secure forms of payment that offer the additional protection and reliability that cash may not. If you need added payment security, here’s how to know whether you should get a cashier’s check or money order.
What is a money order?
A money order is a secure way to transfer money that’s basically a prepaid check. And it’s easy to get one from the post office or a store like Walmart or Western Union. Money orders don’t cost much to purchase, often only a dollar or two in fees. But they are also subject to lower amount limits, typically around $1,000.
You don’t need a bank account when purchasing a money order, making them an excellent option for many people. And when you make the transaction, you’ll receive a receipt so that you can easily track the money order and see when it gets delivered.
What is a cashier’s check?
A cashier’s check is like a personal check, but they’re only available at a bank. The cashier’s check is written from the bank’s account, not yours. When you request one from your local bank, you’ll need to provide the recipient’s name and the amount you want to pay. The bank will then immediately transfer the amount from your account to the bank’s account and issue the check.
While cashier’s checks come with a higher fee, often around $10, they don’t have amount limits like money orders. This payment method make sense when you need to pay a large sum of money, like when making a down payment on a house.
When should I use a cashier’s check vs. money order?
It may be better to use a money order when:
- You need to pay a small amount of money quickly: Money orders are often easier to buy and less expensive. So, if you need $800 to buy a used computer, you might be better suited with a money order.
- You’re buying goods privately: If you’re regularly buying items online or in-person, money orders can be a great way to protect you and the other person involved in the transaction. You’ll have a solid financial record if any issues should arise, and your recipient will know that the money is good instead of writing personal checks that can bounce.
- You don’t have a bank account: You’re not required to have a bank account in order to get a money order. You can purchase the prepaid money order with cash or a debit card and ensure you’ll still have a secure form of payment.
A cashier’s check typically makes more sense when:
- You need to send a large sum (over $1,000): Money orders are often only given for amounts up to $1,000 (or $700 for international money orders). If you need a more considerable amount to cover a down payment or closing costs for a new home, a cashier’s check may be a better option.
- You have access to a bank account and need to pay with certified funds: Since you can only purchase a cashier’s check from a bank, this option may make sense if you have an established relationship with your bank. And getting the bank to write a secure cashier’s check means you’ll be set in situations that require certified funds, like for closing on a real estate transaction or buying a new car.
- You want additional trust in your transaction: Since cashier’s checks are secured by the bank, they tend to be viewed as more reliable than personal checks. They also tend to clear faster in the recipient’s bank, often within a day, vs. a multi-day hold with some personal checks.
The bottom line
Both cashier’s checks and money orders serve the purpose of providing a more secure form of payment than cash or a personal check. But which option you choose ultimately depends on how much money you need, whether you have a bank account, and what level of security you need. Not only will a money order or cashier’s check provide a secure form of payment for a reasonable price, but it also guarantees your payment won’t be turned away for insufficient funds, which can make you a more reliable buyer.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
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Original Source: Should I Get a Cashier’s Check or a Money Order?