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Certified Check Vs. Money Order

Omkar Phatak
Certified checks and money orders are two of the safest ways of ensuring guaranteed payments. The comparison between the two, presented in this story, is aimed at pointing out the prime differences between these two payment modes.
Every day, billions of dollars worth of money transfers occur around the world. There was a time when cash payments formed a large share of this overall transaction volume, but all that changed with the introduction of various payment options like bank checks, money orders, credit cards and debit cards.
Today, there are a plethora of payment options to carry out a money transfer domestically or internationally. Though usage of online payment options like Paypal and credit card usage for online transactions has reduced, certified checks and money orders are still widely used to make payments.
When you are making a money transfer for a purchase or settling a debt, usually the payee decides the mode of payment. You may be on either side of the transaction. It is good to know what modes of payment are available when the people making the transaction are geographically separated and a cash or personal check based payment is not allowed or not possible. Two safe payment options in such a situation are certified checks and money orders that absolutely guarantee payment.

What are Certified Checks?

A certified check is a document guaranteeing the payment of a specified sum of money, that has been authorized by the seal of the bank and the signature of the payer, who is an account holder in the certifying bank.
It is a written confirmation from the bank that sufficient funds are available in the payer's account to make the specified amount of payment. It also guarantees through its seal that signature of the customer is authentic. Both bank and the payer are liable in case the check bounces.
Though no longer as popular as before, certified checks continue to remain in use as safe payment options. A cashier's check is paid for in cash by the payer, while funds for certified checks are deducted from the payer's account with the bank. The fees for certified check payment vary from bank to bank.

What are Money Orders?

Money orders are some of the oldest payment options to safely transfer money through mail. In the US, the USPS (United States Postal Service) is the central body responsible for drawing and delivering money orders.
A money order is a document with a payee's name and seal of the USPS that authorizes the payment of specified amount of money, to the payee. The amount of money to be transferred is already paid for in cash, by the payer. So it's the postal department's responsibility to deliver the amount to the receiver.
USPS provides services to deliver domestic and national money orders. You can purchase a money order using a debit card, traveler's check or cash at any US postal office, certain convenience stores and grocery stores. Money orders ranging from $0.01 to $500 will cost $1.10 and those ranging from $500.01 to $1,000 will cost $1.55. International money orders will cost $4.25. A money order can be cashed by the payee anytime. There is no time limit imposed on it.

Differences Between a Certified Check and Money Order

One of the primary features with regards to which, certified checks differ from money orders, is the drawing organization. Money orders are issued by all the US postal service departments spread all over the country and some select stores, while certified checks can only be drawn from banks, where the payer has an account.
There is no upper limit on the amount of money that can be transferred using a certified check, while there is a limit on how much money you may transfer through a money order.
If you look at the two options, both are comparable in the levels of payment guarantee they provide. Compared to money order fees, the charges for drawing certified checks are substantially higher.
Both are reliable payment options, which you may use to transfer money domestically or internationally. As noted before, certified checks are the options that you would choose for transferring large amounts, while money orders are ideal options for transferring smaller amounts of money locally, while also costing lesser. Choose whichever option is the most convenient and cost-effective for your transaction.