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

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

Money orders are similar to cashier’s checks. They’re documents you can use to make payments, and they’re guaranteed by somebody. They even look alike. However, there are a few differences.

A major difference between money orders and cashier’s checks is the dollar limit. Money orders often have maximum limits. For example, you may not be able to get a money order for more than $1,000 -- actual limits depend on the issuer. Cashier’s checks are used for larger amounts.

There’s also a cost difference. Cashier’s checks are generally more expensive. They’re issued by banks (as opposed to mass market retailers and convenience stores) and they have more horsepower due to the higher limits. These factors help make cashier’s checks more expensive.

You can buy money orders by walking into any establishment that sells them -- a grocery store, post office, or retailer, for example. However, cashier’s checks are only available at banks, and you have to have an account at the bank. If you don’t have a bank account (or there’s no branch nearby) a cashier’s check may not be an option.

Credibility is another difference between money orders and cashier’s checks. Cashier’s checks are drawn against a bank, while money orders are issued by smaller organizations. Sometimes a money order is perceived to be less secure than a cashier’s check and will not be accepted as a substitute. However, cashier's checks (like money orders) can be fakes and are sometimes used in scams.

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