Money Order vs. Bank Draft: What's the Difference?
Edited by Sawaira Riaz || By Sumera Saeed || 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.
Sumera Saeed
Oct 12, 2023
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.
Sumera Saeed
Oct 12, 2023
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.
Sumera Saeed
Oct 12, 2023
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.
Harlon Moss
Oct 12, 2023
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.
Aimie Carlson
Oct 12, 2023
ADVERTISEMENT
Comparison Chart
ADVERTISEMENT
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.
Sumera Saeed
Oct 12, 2023
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.
Sumera Saeed
Oct 12, 2023
Money Order
A money order often has a receipt for tracking.
The money order receipt helps keep a record of the payment.
Sumera Saeed
Oct 12, 2023
Bank Draft
A bank draft is a payment order issued by a bank.
The bank draft ensured that the seller received the payment securely.
Sumera Saeed
Oct 12, 2023
Money Order
It is purchased for a specific value.
He bought a $100 money order at the post office.
Sawaira Riaz
Oct 12, 2023
ADVERTISEMENT
Bank Draft
It draws funds directly from the payer's account.
His bank draft was guaranteed since the bank confirmed available funds.
Sumera Saeed
Oct 12, 2023
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.
Sumera Saeed
Oct 12, 2023
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.
Harlon Moss
Oct 12, 2023
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.
Aimie Carlson
Oct 12, 2023
Bank Draft
A bank draft can be used in international transactions.
She issued a bank draft to pay her supplier in Europe.
Sara Rehman
Oct 12, 2023
FAQs
Can a bank draft be canceled?
Once issued, canceling a bank draft can be complex and might require a declaration of loss or theft.
Sawaira Riaz
Oct 12, 2023
Where can I purchase a money order?
Money orders can be purchased at post offices, grocery stores, and check-cashing stores.
Sumera Saeed
Oct 12, 2023
Can bank drafts be issued in foreign currencies?
Yes, bank drafts can typically be issued in foreign currencies.
Sara Rehman
Oct 12, 2023
Is a money order safe for sending money by mail?
Yes, money orders are often used for mail transactions due to their security.
Sumera Saeed
Oct 12, 2023
Can a money order be made out to a business?
Yes, a money order can be made payable to a business or an individual.
Sara Rehman
Oct 12, 2023
How quickly does a bank draft clear?
Bank drafts usually clear quicker than personal checks, often within 1-2 business days.
Sumera Saeed
Oct 12, 2023
Is there a maximum amount for a money order?
Yes, money orders often have a maximum limit, which can vary by issuer.
Harlon Moss
Oct 12, 2023
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.
Aimie Carlson
Oct 12, 2023
What fees are associated with bank drafts?
Banks may charge issuance fees for bank drafts, and the amount can vary.
Aimie Carlson
Oct 12, 2023
Can I send a money order internationally?
Some money orders, like those from the USPS, can be sent internationally.
Sumera Saeed
Oct 12, 2023
Can a money order be refunded?
Yes, with the receipt and depending on the issuer’s policy, a money order can often be refunded.
Janet White
Oct 12, 2023
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.
Janet White
Oct 12, 2023
Can a money order be traced?
Yes, if you have the receipt, many issuers allow you to track or trace a money order.
Harlon Moss
Oct 12, 2023
What details are needed to fill out a money order?
Generally, the recipient’s name, your address, and your signature.
Sumera Saeed
Oct 12, 2023
Can I cash a money order at a bank?
Yes, most banks will cash money orders, though policies might vary.
Sumera Saeed
Oct 12, 2023
Are bank drafts and money orders safe for online transactions?
Both are considered safe but ensure to verify the legitimacy of the recipient.
Sara Rehman
Oct 12, 2023
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.
Aimie Carlson
Oct 12, 2023
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.
Aimie Carlson
Oct 12, 2023
Do bank drafts expire?
Bank drafts do not typically expire, but holding onto them for too long might cause issues.
Harlon Moss
Oct 12, 2023
Can a bank draft be issued online?
Some banks offer online issuance of bank drafts, but availability may vary.
Aimie Carlson
Oct 12, 2023
About Author
Written by
Sumera SaeedSumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited by
Sawaira RiazSawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
