Ever wonder how people make big payments without using their checkbook, credit card, or a suitcase full of cash? They might be using a money order or a cashier’s check. Both of these payment methods are secure ways to send money and help both parties avoid the hassle of a bounced check.
Though they sound similar, there are some important differences when it comes to choosing between a money order vs. a cashier’s check. We’ll go over the best use of each one, plus their costs and benefits, so you can make the best decision.
Key takeaways
- Cashier’s checks are checks issued by a bank or credit union for a fee.
- Money orders are prepaid payments you can buy at a range of convenient locations, like grocery stores.
- Money orders fees range from $1 to $2, while a cashier’s check fee can range from $5 to $15.
- Cashier’s checks are better suited for large transactions worth $1,000 or more.
- Money orders are best for sending less than $1,000, and you don’t need a bank account to purchase or redeem one.
What is a cashier’s check?
A cashier’s check is an official check issued by your bank or credit union. You pay the bank for the check, and the bank deposits your funds into its accounts and then issues the check.
Since it’s drawn on bank funds and guaranteed by the bank, a cashier’s check is a secure method of payment. It usually costs $5 to $15 to purchase one.
When you’d use a cashier’s check
People usually use cashier’s checks to make large, high-value purchases or official payments, such as:
- Putting a down payment on a house
- Paying closing costs for real estate transactions
- Purchasing or putting a down payment on a car
- Paying a security deposit to your landlord
- Buying fine art
- Paying for property won in an auction
What is a money order?
A money order is a prepaid, paper method of payment. You can buy money orders at post offices, retail stores, and Western Union locations. You can pay for a money order with cash or a debit card. They’re available in amounts up to $1,000, and you don’t need a bank account to buy one. Money orders usually cost $1 to $5.
When you’d use a money order
Money orders are more secure than paying with cash or a personal check. You can use them for transactions such as:
- Paying bills
- Sending money through the mail
- Making payments for services, such as home repairs
- Paying for purchases from vendors that don’t take checks
- Making payments without providing your name and address, as you would with a check
- Making secure payments without a bank account
Comparing money orders vs. cashier’s checks
Cashier’s checks and money orders are both secure ways to send cash. If you’re having trouble deciding how to choose between a cashier’s check vs. a money order, here are a few key differences to consider.
| Cashier’s check | Money order | |
| Issuer | Bank or credit union | Grocery store, post office, Western Union |
| Limits | No mandatory upper limit | $1,000 |
| Fees | Usually between $5 and $15 | Usually $1 to $5 |
| Security | Backed by bank funds | Prepaid at the retailer |
| Speed and convenience | Purchase during bank hours; must have a bank account | Purchase anytime; no bank account needed |
1. Issuer
Cashier’s checks are only available from financial institutions like banks or credit unions, and you generally need a bank account to purchase them. Money orders are more convenient to buy, since you can pick them up at your local Western Union location, grocery store, or post office.
2. Limits
When deciding between a cashier’s check vs. a money order, keep dollar limits in mind. Money orders are usually capped at $1,000, which makes them better suited for small purchases and transactions.
Cashier’s checks have no mandatory upper limit beyond what each financial institution imposes. That makes them a better choice for high-value transactions, such as a large down payment.
3. Fees
In most cases you’ll need to pay a fee to use these payment methods. Costs are usually lower for a money order vs. a cashier’s check: usually $1 to $5 for money orders and $5 to $15 for cashier’s checks. If you plan to use a secure payment method like this rather frequently, money orders could be more cost effective.
4. Security
The difference between a money order and a cashier’s check is that a money order is backed by the retailer selling it, while the cashier’s check is backed by the bank. Plus, cashier’s checks typically have more security features than money orders do, such as security threads and watermarks, plus the payee’s name will already be filled in.
5. Speed and convenience
It takes just a few minutes to buy either a cashier’s check or a money order, but money orders are available in more places, making them more convenient. Cashier’s checks are only available at financial institutions, while money orders can also be purchased at retail stores, post offices, and Western Union locations. Plus, you don’t need a bank account to buy a money order.
Choose the right way to send money
Choosing between a cashier’s check vs. a money order depends on how much you need to send, how much you want to pay for the service, and which one is more accessible for you. If you’re not delivering your cashier’s check or money order to the recipient in person, you can send it in the mail.
Need your funds delivered faster? Use the Western Union app to send money and track your transfer in real time.
FAQs
Yes, money orders usually cost between $1 and $5 to purchase. Cashier’s checks are often $10 to $15, but sometimes as low as $5 or as much as $20, depending on the institution and whether you purchase online or in person.
Money orders are best for transactions under $1,000. You can use them to pay bills, buy goods or services, or send money to someone else. And since you don’t need a bank account to buy a money order, anyone can purchase one.
