When you own a checking account, the threat of fraud and someone cleaning out your account is a real possibility. Almost all checking accounts are now tied to a banking card that can be used for debit or credit transactions. If you use a check or banking card, your account number and name is revealed. There may be times when you don’t want to risk this type of exposure. In those cases, a money order or cashiers check will keep your financial information private. Here are some tips on how to use the two and their differences:
Differences Between A Money Order and Cashiers Check
The main difference between the two is where you can get them. If you decide to use a money order for a transaction, you can obtain one at many different places such as gas stations, drugstores, retailers, convenience stores, post offices or check-cashing locations. When you want to obtain a cashiers check, you can only get one at a bank or credit union.
The cost to use a cashiers check is usually double the cost of a money order. Some financial institutions will require you to have an account with them before they will issue a cashiers check. You can look online to find banks or credit unions that don’t have that policy. Expect to use your photo ID when you want to obtain either option.
Cost – Money order/Up to $5; Cashiers check/Up to $10
Requirements – Photo ID for both; Some banks require an account to obtain a cashiers check
Where Accepted – Banks, businesses and individuals
Best Uses For A Cashiers Check vs. A Money Order
While a money order does cost less to use than a cashiers check, that should not be the only reason why you would choose to use that option over a cashiers check. Typically, money orders are used for smaller transactions. Here are some scenarios when you would want to use a money order:
– Make a payment through the mail that is less than $1000 to avoid sending cash or a personal check
– Stay within your budget and avoid withdrawing too much from your checking account
– Exchanging less than $1000 with an individual who is not a regular acquaintance
A cashiers check would be your best choice if you have the following scenarios:
– The transaction you want to make is higher than the maximum amount allowed for a money order
– The transaction is higher than $1000 and you want the security that a financial institution provides
As an example, if you decide to purchase an item that you find online from an entity or a person that you don’t know, a money order will keep your financial profile private and allow you to buy your item. In contrast, if the item that you are purchasing is a dirt bike, automobile or boat and costs over $1000, a cashiers check will ensure that your funds are backed by a financial institution.
If you do decide to use either option in a transaction, it is a good idea to make sure that the receiving party will accept the method that you want to use.