Postal Service (USPS) offices, drug stores, convenience stores, grocery stores, as well as banks and credit unions. Money orders can be purchased at various locations, such as U.S. However, while cashier’s checks are backed by a bank, money orders aren’t. Money orders are essentially the same as cashier’s checks - they’re a secure way to send money to a third party. But make sure to check with your bank, as some will waive the fee for certain account holders, and other banks may offer them for free. Fees will vary across banks, but you can typically expect to pay around $10 for a cashier’s check. Some banks will charge customers a fee to purchase a cashier’s check. Some financial institutions cap the transaction amount, but in general, cashier’s checks don’t have a limit, so you can purchase one for $50 or $25,000, just as long as you have the funds in your account. The check is then made out to the recipient and signed by a representative of the bank. When you buy a cashier’s check, the bank deducts the money from your checking or savings account and puts it in the bank’s account (if you’re not a customer of the bank, you can also pay in cash). Whereas with a personal check, the customer signs it because the funds are withdrawn from their personal checking account. The difference between a personal check and a cashier’s check is that with a cashier’s check, a bank representative will sign it because the funds are drawn from the bank’s account. Since the check is basically written by the bank, the funds are verified, and the recipient can rest assured that the funds will be available. You agree that we have no liability for any damages.A cashier’s check is an official check issued by a bank or credit union to a third party, usually on behalf of the bank customer. User assumes all risk of use, damage, or injury. The information is "AS IS", "WITH ALL FAULTS". Īrticles on are general information, and are not intended to substitute for professional advice. Design and Launch an Online Web Design Business in a Week. Money order: Comparison TableĬlarke G & Whitcomb A. On the other hand, money orders are easier to purchase as they can be purchased from an approved institution. Ease of purchaseīank drafts are harder to obtain as the issuer must go to their bank to purchase one. While a bank draft can only be issued by a bank, a money order can be issued by an approved institution such as post office, certified store or bank. On the other hand, a money order is more secure as it does not contain personal information. SecurityĪ bank draft is insecure as it contains personal information such as the bank account. While in a bank draft a check is made to the payee after accepting the money from the issuer’s account, a money order is purchased using cash. On the other hand, a money order refers to a certificate that guarantees the payee of payment on demand. Both are considered as safe payments as the payer does not need to carry large sums of moneyĭifferences between Bank draft and Money order DefinitionĪ bank draft refers to a payment made on behalf of the payer and guaranteed by the issuing bank.Both are specified and printed prepaid payments.Similarities between Bank draft and Money order Delays may be experienced where money orders are cashed in different banks other than the issuer.It is difficult to find out whether a money order was cashed.However, money orders have disadvantages including They can be cashed at a credit union or local bank.They can be cashed in a different country than the one issued in.They can be deposited to a bank account at no fee.They are safe as they do not include personal information such as the bank account number.This receipt should be kept until the purchaser is certain the money has cleared as tracing the payment without the receipt can be cumbersome.Īdvantages of using money orders include The purchase is then issued a receipt that includes the serial order. Money orders however has a $1,000 maximum limit hence a person would need to purchase several money orders for amounts that exceed this limit. The buyer must include the name of the recipient as well as the amount they should receive. ![]() People should hence be cautious when receiving them from people they do not know. Although they are inexpensive, they can be fraudulent. For anyone with cash, money orders are easy to acquire as they are sold at gas stations, post offices and grocery stores. They are often used by people without access to a standard checking account and are readily accepted and converted to cash. Issued by a banking institution or government, this is a certificate that guarantees the payee of payment on demand.
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