What’s the difference between a cashier’s check and a money order?

When you have to make a payment, but you can’t use a personal check, credit card, cash or a digital option like Zelle, a cashier’s check or money order can be a good alternative.

Cashier’s checks and money orders may be less vulnerable to fraud and theft than personal checks, and they won’t bounce. You can get a money order at many types of businesses, though they’re usually limited to $1,000 or less. Cashier’s checks come from banks and credit unions and can be much larger.

Differences between a cashier’s check and a money order

What is a cashier’s check?

A cashier’s check is a bank-issued check guaranteed by the bank’s funds, not the accountholder’s. The bank immediately withdraws the money from the customer’s account. It’s commonly used for large transactions (such as a home or car purchase) because the check won’t bounce.

Cashier’s checks can be obtained at banks or credit unions and sometimes online. Banks typically charge anywhere from $5 to $15. A cashier’s check generally cannot be canceled or stopped after it’s issued.

What is a money order?

A money order is a paper, prepaid payment method used to send funds to someone else. Unlike personal checks, money orders are paid for in advance. This ensures the recipient that the funds are guaranteed. 

Money orders are widely available at banks, post offices, and some retail locations, and are typically used for smaller payments (usually up to $1,000). They are an affordable alternative to cashier’s checks, with fees ranging from about $1 to $5.

When to use each payment method

Both cashier’s checks and money orders are good payment options when you or the recipient need verification of funds availability and want to avoid bouncing a check. These methods are strong choices for transactions where guaranteed payment is required, such as when making a large purchase. 

Because both require upfront payment of the full amount, they eliminate the risk of insufficient funds. Whether you choose a cashier’s check or a money order depends on the transaction size, convenience, and the level of security you need. However, either can be a good solution in situations where guaranteed payment is necessary.

When to use a money order

• You’re making a payment of less than $1,000
• You need to make a payment but don’t have a bank account
• You want a payment instrument that is highly accessible and easy to buy
• You need a payment instrument that is guaranteed not to bounce

When to use a cashier’s check

• You need to make a payment of over $1,000 for a major transaction, such as buying a home or car
• You want maximum security
• You prefer a payment method you can get from your bank, either online or at a branch
• You don’t mind paying a substantial fee, up to $15, for the service
• You need a payment instrument that is guaranteed not to bounce

Are cashier’s checks safer than a money order?

A cashier’s check is safer than a money order because the “pay to” field is filled out by the issuing bank at the point of purchase. With a money order, however, the name of the payee is filled out by the purchaser.

Losing a cashier’s check is much different than losing a personal check since this type of check generally can’t be stopped instantly. You will need to contact your bank, file a claim and wait up to 90 days.

Replacing a lost or stolen money order can also be complicated. It could take up to 30 days to confirm the theft or loss of your money order. In addition, it could take up to 60 days to investigate. 

Bottom line

Cashier’s checks and money orders offer a more secure way to make a payment than cash or personal check. A cashier’s check is better suited to larger transactions, though it may come with a higher fee. Money orders may have limits on the dollar amount, but they come with low fees and are widely available.