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

Cashier’s checks and money orders are more secure than personal checks and won’t bounce. However, the two payment types are different. Read on to learn what distinguishes a money order from a cashier’s check, how to get one, and when it makes sense to use one for your payment purposes.

What is a bank check?

A bank check is a paper check issued by a bank to a third party, usually in the name of a bank customer, who pays the bank the face value of the check. Because the bank withdraws money from the customer’s bank account beforehand, the check is guaranteed not to bounce.

Cashier’s checks can be purchased from banks and credit unions. If you order online, the bank may limit the amount of the check. For larger amounts, you may need to visit a branch in person.

Cashier’s checks are typically used in larger transactions, such as completing a home sale or purchasing a car or boat. Once a cashier’s check is written, you can’t cancel it or stop payment – because the funds have already been withdrawn.

Fees for cashier’s checks vary, but customers of large, traditional banks can expect to pay at least $10. For example, Wells Fargo charges $10 and Bank of America charges $15 unless you’re part of the bank’s Preferred Rewards program, which waives the fee.

However, some banks do not charge their customers for bank checks. Ally, for example, does not charge a fee for this service. Quontic, another online-only bank, does not charge a fee for bank checks or money orders.

Credit unions typically charge fewer fees than large banks, and in some cases, they charge no fees at all. Alliant Credit Union, for example, does not charge a fee for cashier’s checks.

What is a money order?

A money order is a paper payment instrument that allows you to send money to a third party securely and inexpensively. The issuer receives the face value of the money order in cash or by debit card or traveler’s check, so the payee can be assured that the money order is valid for the amount specified.

Money orders are safer than personal checks because they are prepaid. They are widely available: banks issue them, as do many grocery stores, convenience stores, gas stations, the U.S. Postal Service, and check cashing locations.

Many money order issuers have a maximum purchase limit of $1,000. Money orders are typically used for smaller, everyday transactions, such as paying a utility bill or a security deposit on a rental apartment. If you need to make a payment of more than $1,000, you can simply purchase multiple money orders to cover the cost.

Money orders are cheaper than cashier’s checks. The U.S. Postal Service charges just $2.35 for money orders up to $500 and $3.40 for money orders between $500.01 and $1,000. Walmart charges a maximum fee of $1. Chase, the largest bank in the U.S., charges $5 for money orders.

When should which payment method be used?

Generally, cashier’s checks or money orders are appropriate when the payee wants to be sure that the payer has the funds. To obtain a cashier’s check or money order, the full amount must be paid to the issuer up front, so there is no risk of the payment bouncing.

A cashier’s check or money order is guaranteed and can only be cashed by the payee. With a cashier’s check, the issuing bank fills in the “Pay to” line, which prevents the check from being fraudulently cashed if it is lost or stolen.

Cashier’s checks and money orders have similarities but may be more appropriate for different circumstances.

When should a money order be used?

• You make a payment of less than $1,000
• You need to make a payment but don’t have a bank account
• The payee needs immediate access to the money
• You want a cost-effective way to pay bills or conduct everyday transactions
• You want a payment method that is easily accessible and easy to purchase
• You need a payment method that is guaranteed not to burst

When should a bank check be used?

• You need to make a payment of over $1,000 for a major transaction, such as purchasing a home or car
• You want maximum security against loss or theft of money
• The payee needs quick access to the money
• You prefer a payment method that you can get from your bank online or in a branch
• You don’t mind paying a substantial fee, usually around $10 to $15, for the service
• You need a payment method that is guaranteed not to burst

Where can I buy bank checks and money orders?

Cashier’s checks can be purchased at banks and credit unions. If you have a bank account, your bank may not charge you a fee for a cashier’s check, or you may pay less than non-customers.

Not all banks will issue cashier’s checks to people who do not have an account with them. However, many banks will do so, usually for an additional fee.

Money orders can be purchased in many places. They are issued by banks and credit unions, as well as many grocery stores, convenience stores, check cashing locations, and the U.S. Postal Service.

Retailers also sell money orders, some with cheaper fees. Prices, purchase limits and availability may vary by store location. Be sure to have photo ID with you before purchasing a money order.

Here are the fees charged for money orders at different locations:

• US Postal Service: $2.35 for amounts up to $500; $3.40 for amounts over $500 to $1,000
• Walmart: Maximum fee of $1
• Chase: $5
• Kroger: Fees start at $1 with a Shopper’s Card and $1.10 without, varies by location

Differences between a bank check and a money order

	Bank check	Payment order
Cost per item	Usually $10 to $15	Usually less than $5
Availability	Offered by banks and credit unions, in some cases only to their own customers	Offered by financial institutions, supermarkets, post offices and other shops
Security	No risk of chargeback, plus the bank fills in the “payee” field	No risk of return, however the payer is responsible for filling in the “Pay to” field
restrictions	Normally no limit on the amount, although a personal visit may be required for a high check value	Typically capped at $1,000 or less
Best for	Large transactions with additional protection from the financial institution	Smaller transactions or when a check from a bank is not an option

Are bank checks safer than a money order?

A bank check is more secure than a money order because the “payee” field is filled in by the issuing bank at the time of purchase. Only the payee can cash or deposit the check upon presentation of an ID card.

With a money order, on the other hand, the name of the payee is entered by the buyer and if this is not done immediately and the money order is lost or stolen, the money order can be cashed by anyone.

Fraudsters will try to duplicate bank checks, so it’s a good idea to verify the validity of the check with the issuing bank before cashing it or depositing it into your account.

Bank checks are harder to replace than money orders if lost or stolen. The bank that issued the check may require you to purchase a bond from an insurance company for the amount of the check. The bond makes you, not the bank, responsible for any losses if the check is cashed.

You may also have to wait 30 to 90 days before the bank issues a replacement check.

Replacing a lost or stolen money order is easier. If you have the original receipt, the place you bought the money order may be able to replace it or refund you the purchase price. You will likely have to pay a fee for this service.

Conclusion

Cashier’s checks and money orders offer a more secure payment method than cash or personal checks. For those without checking accounts, they provide solid alternatives for payments.

A cashier’s check is better for larger transactions but may come with a higher fee. Money orders may have a limited amount but have low fees and are widely accepted.

–Freelance writer David McMillin updated this article. Former Bankrate writer René Bennett contributed to an earlier update.