Money orders are prepaid paper certificates that function like a check: The listed recipient can deposit or cash them. One big advantage of money orders is that you can buy them at lots of different places, including post offices and grocery stores as well as banks and credit unions. That convenience makes them a good option for people who don't use bank accounts, or who don't have access to a nearby branch of their preferred bank.
Money orders are guaranteed — you're handing over cash for the clerk to process — and they never expire, Kenneally says. Fees can vary, too.
An electronic check, or e-check, is a digital version of a paper personal check issued through your bank. You can often set up automatic payments using e-checks so you don't have to remember to write out paper checks for recurring bills like your rent or mortgage. While they look good in pictures, those giant checks you see lottery and contest winners holding are just props. You can't cash them.
For instance, landlords and rental agencies may require paper checks. In addition, some businesses charge a fee or surcharge for using a credit card. Alternatively, some landlords offer discounts to customers who pay via personal check or cash.
Personal checks also offer a certain level of security. The writer of the check can put a stop payment on a lost check to ensure the money does not get deposited by someone else.
Also, paying via personal check provides proof of payment, since the bank keeps copies of canceled checks checks which have already had the funds transferred. However, the difference between a personal check and a certified check is that the bank verifies that the account holder has enough money in their account to cover the check.
Since a certified check requires bank verification, these checks are much less convenient for the account holder and are generally unnecessary for everyday purchases. The certification process protects the seller from a bounced check in these situations. Not all banks offer certified checks. According to the FTC , several fraudulent check schemes rely on the fact that it can take banks weeks to detect a fraudulent check.
This means a seller who receives a fraudulent check will not only be out of the merchandise that they handed over in exchange for the check, but they also may be on the hook for any money they spent from the fraudulent funds. Opportunities to use a paper check for payment may be relatively few and far between these days. Emily Guy Birken is a former educator, lifelong money nerd, and a Plutus Award-winning freelance writer who specializes in the scientific research behind irrational money behaviors.
In the event a buyer attempts to cash the money order and claim the funds never arrived, the post office is able to dispute and show proof of cashing. This makes it one of the most reliable forms of payment when purchasing from eBay or other independent seller venues online. Related: Types of Investments. This special form of check is issued by the US Post Office or places that handle check cashing including some supermarket chains. The money order is paid for up front and is considered a guaranteed form of payment.
Money orders include a receipt stub, allowing the purchaser to obtain a refund if the money order is lost or not cashed within a certain period of time usually one year. This is what you normally think of when someone mentions a check. An individual may write a personal check to pay for any number of things, payable only to the person or company named. Whether you have never received a payment by check or if your company uses them every day, it is convenient that you know all the types of cheques that we are going to discuss in the following article: 1.
What is a cheque? Crossed cheque We can easily identify a crossed cheque if it has two parallel lines on it. Nominative cheque As you can deduce from its name, the details of the beneficiary person or company appear on it. Bearer cheque The bearer cheque is the best known and probably the most common.
Its peculiarity is that it cannot be cashed in cash, only through bank account deposit. Delivery receipt : This is not necessarily a type of cheque, but rather, it is what the bearer signs when they receive the money from their cheque.
FAQ about cheques How to cash a check? Can I cash a cheque at an ATM? Not all banking entities allow it. Find out at the bank in advance. What does it take to cash a cheque?
Can I cash a cheque at any bank?
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