Are cashiers checks and money orders the same?
Cashier’s checks and money orders differ in several ways. They differ in terms of where they can be purchased, where they can be cashed, the amounts of money that can be paid through them and in their costs.
Where they can be purchased
One key difference between a cashier’s check and a money order is in terms of where (and how) they can be purchased. So you find that cashier’s checks can usually only be purchased in banks. When you purchase a cashier’s check, you deposit an amount of money equivalent to the check’s value into the bank’s (own) account. The bank then, having received the money, issues the check: it becomes the check’s drawer.
Money orders, on the other hand, can be purchased at many other locations, not just banks. You can purchase a money order at a supermarket, a convenience store, a bank, a Western Union Outlet, the post office… and so on. It is unlike a cashier’s check that, as we have observed, can usually only be purchased at a bank. In practical terms, when you buy a money order, what you get is simply a payment order for the amount indicated on it. So it is a payment order, not a check.
Where they can be cashed
Another important difference between a cashier’s check and a money order is in terms of where (and how) they can be cashed. Just as there are more locations where you can purchase a money order, so are there more locations where you can cash a money order. In that respect, you find that you can cash a money order at the post office, at a convenience store, at a supermarket, at a Western Union outlet… and so on.
On the other hand, there are fewer places where you can cash a cashier’s check. In fact, your options for cashing a cashier’s check are usually limited to either taking it to the issuing bank, depositing it into your account or cashing it a check-cashing store.
The payable amounts
Yet another key difference between a cashier’s check and a money order is in terms of the amounts of money that can be paid through either instrument. So you find that the amounts of money that can be paid through money orders are, in most cases, rather modest. In that respect, for instance, the USPS (as of August 2019) apparently limits money order payments to $1,000. If you want to pay bigger sums of money, you have to issue multiple money orders. But that then attracts a great deal of scrutiny…
With cashier’s checks, there are no such limits. You can write a cashier’s check for large sums of money. For instance, you can write a single cashier’s check for $5,000 — which, if you were relying on money orders, would have necessitated 5 different money orders.
The cost factor
On another note, you tend to find the cashier’s checks being slightly more expensive than money orders. The upside though, as noted earlier, is in the fact that you can pay bigger sums of money through a single cashier’s check. Thus, for instance, whereas you could issue a single cashier’s check for $5,000, that would probably necessitate 5 difference money orders, each bearing $1,000 (and each costing something)…
On bank account involvement
It is also worth mentioning that the processing of a cashier’s check often (but not always) works more conveniently when the issuer and recipient have bank accounts. On the other hand, the purchasing and cashing of money orders works just as well whether or not the issuer and recipient have bank accounts. It is possible for someone to go to a Walmart store and buy a money order there without being asked anything about bank accounts. The purchaser then sends the money order to the recipient who then proceeds to cash the money order at another Walmart outlet, without the involvement of bank accounts at any point in the process.