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Money Order vs. Bank Draft: What's the Difference?

Edited by Janet White || By Harlon Moss || Updated on October 12, 2023
A money order is a prepaid payment order purchased from institutions, while a bank draft is a payment order issued by a bank, drawing funds from an individual’s account.

Key Differences

Money orders provide a secure method of payment, allowing individuals to transmit funds without using cash, while bank drafts, serving a similar purpose, leverage the stability and assurance of bank-issued payment instruments.
A notable distinction lies in the purchase location; money orders can often be obtained from various outlets like post offices, grocery stores, and check-cashing stores, whereas bank drafts are typically acquired directly from a banking institution, reflecting a notable difference in accessibility between a money order and a bank draft.
When considering the limits, money orders typically have a capped, predetermined maximum value which often constrains the sum that can be sent, while bank drafts, typically do not impose a maximum limit, making bank drafts more conducive to transmitting larger sums compared to money orders.
Focusing on safety, both money orders and bank drafts are considered secure payment methods, but bank drafts may hold an edge in perceived security due to the direct involvement of banking institutions, contrasting the varied issuers of money orders.
In the context of international transactions, a bank draft can often be utilized for overseas payments and may be issued in foreign currency, while a money order may present limitations or specific requirements for international use, discerning a usage difference between a bank draft and a money order.

Comparison Chart

Issuing Institution

Various institutions

Purchase Locations

Diverse outlets

Maximum Amount Limit

Typically yes
Typically no

Perceived Security Level

Often considered very secure

International Use

More commonly used

Money Order and Bank Draft Definitions

Money Order

A money order is a pre-paid negotiable instrument.
I sent a money order to pay for my online purchase.

Bank Draft

A bank draft can be used for larger transaction amounts.
They utilized a bank draft for the home’s down payment due to its high value.

Money Order

A money order often has a receipt for tracking.
The money order receipt helps keep a record of the payment.

Bank Draft

A bank draft is a payment order issued by a bank.
The bank draft ensured that the seller received the payment securely.

Money Order

It is purchased for a specific value.
He bought a $100 money order at the post office.

Bank Draft

It draws funds directly from the payer's account.
His bank draft was guaranteed since the bank confirmed available funds.

Money Order

A money order is used to securely send funds through the mail.
She prefers to pay her bills with a money order to avoid using checks.

Bank Draft

It's considered a highly secure method of payment.
For the antique car, he preferred a bank draft due to its safety in large transactions.

Money Order

It is a physical form of payment without needing a bank account.
Using a money order, he was able to pay without revealing his bank details.

Bank Draft

A bank draft can be used in international transactions.
She issued a bank draft to pay her supplier in Europe.


Can a bank draft be canceled?

Once issued, canceling a bank draft can be complex and might require a declaration of loss or theft.

Where can I purchase a money order?

Money orders can be purchased at post offices, grocery stores, and check-cashing stores.

Can bank drafts be issued in foreign currencies?

Yes, bank drafts can typically be issued in foreign currencies.

Is a money order safe for sending money by mail?

Yes, money orders are often used for mail transactions due to their security.

Can a money order be made out to a business?

Yes, a money order can be made payable to a business or an individual.

How quickly does a bank draft clear?

Bank drafts usually clear quicker than personal checks, often within 1-2 business days.

Is there a maximum amount for a money order?

Yes, money orders often have a maximum limit, which can vary by issuer.

Is a bank draft secure for large transactions?

Yes, bank drafts are often used for large, secure transactions due to the bank’s verification of funds.

What fees are associated with bank drafts?

Banks may charge issuance fees for bank drafts, and the amount can vary.

Can I send a money order internationally?

Some money orders, like those from the USPS, can be sent internationally.

Can a money order be refunded?

Yes, with the receipt and depending on the issuer’s policy, a money order can often be refunded.

Can I get a bank draft from any bank?

Typically, you need to have an account with a bank to get a draft from them.

Can a money order be traced?

Yes, if you have the receipt, many issuers allow you to track or trace a money order.

What details are needed to fill out a money order?

Generally, the recipient’s name, your address, and your signature.

Can I cash a money order at a bank?

Yes, most banks will cash money orders, though policies might vary.

Are bank drafts and money orders safe for online transactions?

Both are considered safe but ensure to verify the legitimacy of the recipient.

Is a bank draft the same as a cashier’s check?

Both are similar, but a bank draft is often used for larger amounts and international payments.

What do I do if my money order is lost?

Report the loss to the issuer, who may be able to replace or refund it with the receipt.

Do bank drafts expire?

Bank drafts do not typically expire, but holding onto them for too long might cause issues.

Can a bank draft be issued online?

Some banks offer online issuance of bank drafts, but availability may vary.
About Author
Written by
Harlon Moss
Harlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
Edited by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.

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