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Money order vs cashier's check vs bank draft vs certified cheque
A landlord wants certified funds, a car seller will not take a personal cheque, or a government form asks for a money order. These guaranteed payments sound alike, but they come from different places and suit different amounts. This guide compares the four you are likely to meet in Canada and the United States, shows which to choose, and explains how to protect yourself from fakes. It is general information, not financial advice.
The short answer
All four are guaranteed forms of payment, meaning the money is set aside before the paper is handed over, so it should not bounce the way a personal cheque can. A money order suits smaller amounts and people without a bank account. A cashier's check in the United States, or a bank draft in Canada, suits large amounts such as a vehicle purchase or a closing. A certified cheque sits in between and is less common than it used to be.
When a seller or landlord asks for certified funds, ask which of these they will accept before you go to the bank. The names are used loosely, and getting the wrong one can mean a second trip and a second fee.
Side by side comparison
| Money order | Cashier's check (US) | Bank draft (Canada) | Certified cheque | |
|---|---|---|---|---|
| Who guarantees it | The issuer, such as a post office, retailer, or bank. You prepay the full amount. | The bank. It is drawn on the bank's own funds. | The bank or credit union. It is drawn on the institution's own funds. | Your bank confirms your personal cheque and sets the money aside. |
| Where you get it | Post offices, many retailers, banks, and credit unions | A bank or credit union, usually one where you hold an account | A bank or credit union, usually one where you hold an account | Your own branch, if it still offers the service |
| Bank account needed | No | Usually yes | Usually yes | Yes |
| Typical use | Rent, deposits, mailed payments, smaller purchases | Vehicles, down payments, closings | Vehicles, down payments, closings, tuition | Where a payee asks for one by name |
| Amount limit | Issuers cap the amount per money order. Ask the issuer. | Generally limited by the funds you have | Generally limited by the funds you have | Limited by the funds you have |
| Fee | Set by the issuer | Set by the bank. Some account packages include them. | Set by the bank. Some account packages include them. | Set by the bank |
We have left out dollar figures on purpose. Fees and limits differ by issuer and change over time, so check with the post office, store, or bank on the day.
What a money order is
A money order is a prepaid paper payment. You hand over the amount plus a fee, and the issuer prints a money order for that amount. You then fill in the payee and your own details. Because it is prepaid, the person receiving it knows the funds exist.
Money orders are easy to buy and do not need a bank account, which makes them useful for rent, deposits, and paying by mail. The main drawback is the cap on each money order. For a large payment you may need several, each with its own fee, and at that point a draft or cashier's check is simpler.
Fill it in as soon as you buy it, because a blank money order can be used by anyone who finds it. Our step by step guide to filling out a money order covers each field and what to do with the receipt stub.
What a cashier's check or bank draft is
A cashier's check, called a bank draft in Canada, is a payment the bank issues from its own funds after taking the money from your account. A bank employee prepares it with the payee's name and the amount already printed, so there is nothing for you to fill in by hand.
Sellers like them for large amounts because the bank, not an individual, stands behind the payment. Expect to show identification, and have the payee's exact legal name ready. If the name is wrong, the payee may not be able to deposit it, and replacing a draft takes time.
In Canada, ask whether you need the draft in Canadian or US dollars. Banks can usually issue either, and a draft in the wrong currency will cost the payee money to convert.
What a certified cheque is
A certified cheque is one of your own personal cheques that your bank has stamped to confirm the funds are there. The bank holds or removes that amount from your account so the cheque will clear. You write the cheque yourself, in the usual way, and the branch certifies it. If you need a refresher, see how to write a cheque in Canada or how to write a check for the US layout.
Some institutions have stopped certifying cheques and offer a draft or cashier's check in its place. If a payee asks for a certified cheque, ask whether a bank draft is acceptable. In most cases it is.
Which one should you use?
Match the payment to the amount, to what the payee accepts, and to whether you have a bank account.
| Situation | Usually the best fit |
|---|---|
| First month's rent or a deposit, and the landlord will not take a personal cheque | Money order, or a draft if the amount is above the money order cap |
| Buying a used vehicle from a private seller | Cashier's check or bank draft, ideally handed over at the seller's or buyer's bank |
| Down payment or closing funds | Whatever the lawyer, notary, or title company specifies. Ask them in writing. |
| Paying a government fee by mail | Whatever the form's instructions list. Many accept a money order or a certified cheque. Read the instructions for that form. |
| You have no bank account | Money order |
| Sending money to another country | Ask the payee and your bank. A paper instrument may be slow or costly to cash abroad, and a transfer may suit better. |
How to avoid fraud
Guaranteed payments are safer than personal cheques, but fakes exist, and the rules are different for the person paying and the person being paid.
If you are receiving one
- Be wary of any payment for more than the agreed price with a request to send back the difference. That is a common scam pattern.
- To verify a cashier's check or draft, call the issuing bank using a phone number you look up yourself, not the number printed on the item.
- Remember that funds showing in your account do not prove the item was genuine. A bank can reverse a deposit later if the item turns out to be fake. Ask your bank when the funds are truly final.
- For a vehicle or other large sale, meet at the buyer's bank and watch the draft being issued.
If you are paying with one
- Keep the receipt or stub. It carries the serial number you will need to trace or replace the item.
- Do not hand over a draft until you have the goods, the keys, or the signed documents.
- Get a receipt from the payee. For a private sale, a signed bill of sale or vehicle bill of sale records the amount and the payment method.
What to do if one is lost or stolen
Contact the issuer right away with your receipt. A lost money order can usually be traced and replaced by the issuer for a fee, after a waiting period. A lost cashier's check or draft is harder. The bank may ask you to sign a declaration and may require an indemnity bond before it issues a replacement, and the process can take weeks. Ask your own issuer for its procedure, because it differs from one institution to the next.
Depositing or cashing one
You deposit a money order, draft, or cashier's check the same way as any cheque. Sign the back in the endorsement area and deposit it at a branch, a bank machine, or with your bank's mobile app if the bank accepts that item type. Our guide to endorsing a check shows where and how to sign, and how to fill out a deposit slip covers the branch paperwork.
Next step
A guaranteed payment normally travels with paperwork: a rental application, a bill of sale, or a government form. If it arrived as a PDF, open it with the free fill a PDF tool, complete it on screen, and download it, with no account and no upload. This article is general information, not financial advice. Confirm fees, limits, and hold times with the institution that issues or receives your payment.
Frequently asked questions
What is the difference between a money order and a cashier's check?
A money order is a prepaid payment you can buy at a post office, a store, or a bank without holding an account, and each one has a capped amount. A cashier's check is issued by a bank from its own funds, usually for an account holder, and suits larger amounts.
Is a bank draft the same as a cashier's check?
They work the same way. Bank draft is the usual term in Canada and cashier's check is the usual term in the United States. In both cases the bank takes the money from your account and issues the payment from its own funds.
Is a certified cheque the same as a bank draft?
No. A certified cheque is your own personal cheque that the bank has confirmed and set funds aside for. A bank draft is issued by the bank itself. Some institutions no longer certify cheques and offer drafts instead.
Which is safer, a money order or a cashier's check?
Both are guaranteed when genuine. For large amounts, a cashier's check or draft is usually preferred. Either can be counterfeited, so a recipient should verify it with the issuer using contact details they find themselves.
Can a cashier's check or bank draft bounce?
A genuine one is backed by the bank's funds. The real risk is a counterfeit. A deposit can be reversed later if the item proves fake, even after the funds appeared in your account.
How much does a money order or bank draft cost?
Fees are set by each issuer and change over time, and some bank account packages include drafts. Check the current fee with the post office, store, or bank before you go.