When wanting to send payment without a checking account or credit card, both money orders and cashier's checks are valid forms of remuneration. Knowing the differences, advantages, and disadvantages of the two can save considerable money, time, and aggravation. Make an informed decision.

Similarities

Several similarities exist between a cashier's check and a money order:

The US Federal Reserve determined both are valid forms of payment, or more correctly, demands for payment. For example, a person buys a money order, sends it to a family member who takes it to his bank. He presents the money order and "demands payment," whether via a cash payment, a deposit, or a blend of both.

Both are considered personal check replacements.

Both require full payment of the payable amount at the time of purchase.

Sellers usually charge a purchase fee.

Neither is held against deposit for longer than one business day.

Both are sometimes accepted or denied by vendors or creditors.

Under certain purchase conditions, valid state-issued photo ID may be required.

Both can take up to ten business days before actually "cleared" or found valid.

Both money orders and cashier's checks are easily forged.

Differences

Differences between the two are fewer than the similarities, but they can be equally important:

Only financial institutions sell both money orders and cashier's checks.

Financial institutions, US Post Offices, and licensed retail outlets, such as gas stations, pawnshops, grocery stores, or certain department stores sell money orders.

Banks, et al, usually charge more for a cashier's check than for a money order.

Money orders are valid up to $1000.00 each. If the same person purchases more than $3000 in the same day, federal law requires presentation of photo identification.

Cashier's checks are valid up to $5000.00 each. Photo ID may be required.

Counterfeits

Because counterfeiters flood forged money orders and cashier's checks, never accept them for anyone in exchange for cash-"a bit of commission for assistance." The person or entity cashing the forged money order or cashier's check is financially responsible for repayment of the total check amount-not the sender.

Should the receiving party have any doubt or suspicions, call the issuing agency listed on the form and verify its legitimacy before cashing it. When possible, request proof of identification from the giver and note all information as well as a physical description as detailed as possible. If the issuance is a forgery, the issuing agency will take action from their standpoint. The receiver should immediately contact law enforcement or the counterfeit unit of the nearest Secret Service branch office.