So what's the deal with cashier's checks and money orders, anyway? Can't I just pay with my phone app?
Not for everything. Even in this age of phone app payments, paper checks still have a place in our financial lives.
So what's the difference beween them and and why should you care?
Cashier's checks are considered a secure form of payment because the issuing bank gurantees the money, not you. This is why many businesses and landlords insist on them. They are normally used for large financial transactions ($1,000 and above).
They work like this.
Instead of you writing one of your Hello Kitty checks, the bank issues an official check addressed to the person you wish to pay. Once the check is made, funds are withdrawn from your personal account and deposited into the bank's escrow account. Therefore, you cannot even be issued a cashier's check unless you have enough funds to cover the check, which is why they are considered a safe and secure payment.
The good thing about cashier's checks is they normally have no fees. The downside is you must have an account with a bank or credit union to get one.
Money orders (or money grams) are also considered a safe and secure payment because they must be purchased with cash. You can buy them at the post office, money transfer businesses, and some retail stores. They are considered secure because the money is guaranteed by the business that issues them.
You may want to use a money order for many reasons: you do not have a bank account, you happen to use a lot of cash you don't want to declare, or you want to protect your check account information from identity theft, which appears on your personal check.
The upside to money orders is they are convenient to use and can be purchased almost anywhere without a bank account. The downside is you must pay a fee per check (about a dollar or so per check) and the individual checks are for a $1,000 or less, depending on the institution who issues it. Therefore, it's difficult to do high dollar transactions with them.
For more information on checks, see