Does Security Vary Across Banking Checks & Orders?

Question

Why opt for a Certified Check instead a Cashier's Check?
Or a "Chase" Cashier's Check over of a "Chase" Personal Money Order?
Or a Personal Money Order and not a Postal Money Order?

Which is the most secure for the sender?
Which best guarantees funds to the receiver?

Or are they all the same and it is simply a matter of convenience?

Answer 1

Purpose
– Certified cheques and Cashier's cheques generally used for simple Trade transactions by usually small and medium sized companies, stocks and share receipts (generalisation); (6)
– Personal Money Orders and Postal Money Orders used for small and personal transactions.
Confidence generally lies with the clout private financial institutions have in the former, over public (government and small money lender) institutions with the latter.


General caveats for non-commercial users on cheque usage
– cancel all cheques, and;
– ensure cheques are made out to specific parties with particulars in full on both sides of cheques and amounts are specific;
– draw a line beyond the amount made out
(Words: -----Ten thousand only ------ Numerical: $10,000.00------) to make forging difficult where cheques are used and not money order;
– Assign separate specific accounts to facilitate withdrawal and receiving (collateral, limit fraud, accounting and company purposes) if large sums are involved, with proper authorization required based on private arrangements or minutes of the company.

___________________
Certified cheque: (1)(2)
Pro-Recipient: Certified cheque provides assurance to the recipient that the sender is good for the transaction or the recipient has doubt over the ability of funds being honoured by the sender.
In the highly unlikely event of a shortfall, difference to be made up by the bank. Used in small and discrete Trade transactions.
– guarantees funds to the recipient on behalf of the sender by the bank; liability falls on the issuing bank;
– funds in default (unlikely), not all banks (varies bank to bank) will be willing to release monies until sufficient formal redress has been made by claimant and/or sender. Delay may be experienced;
– fees: certify availability of funds.

Cashier's cheque: (3)
Pro-Recipient: Amount paid in full to buy the cheque from financial institution (bank), therefore less likely to bounce as bank takes on the responsibility to make good shortfall.
– sender pays in full before the bank accepts liability;
– not all banks worldwide necessarily accepts cashier's cheque
– fees: process money transfer


Postal money order on condition: (4)
Pro-Recipient: Amount paid in full to buy the money order; money is committed at point of sales and therefore less likely to bounce.
Pro-Sender: Postal money orders may be cancelled provided a time difference exists to allow the sender to cancel the transaction. Onus lies on the recipient to bank it in. Certain money orders may also be cancelled in a person’s name, rather than leaving it blank.
– personal verification on authenticity of recipient’s particulars (account details, etc.);
– correct account and amount verified by both parties;
– both parties will receive a receipt of chit as proof of payment and deposit;
– subject to postal rule of the country but generally accepted;
– restrictions apply on amount to be transferred; (4a)
– fees: to process money transfer.

Money Order: (5)
As above.
The named individual to receive a specific amount of cash on demand. Often used by people who do not have checking accounts (full current account facilities: cheque book, no restrictions, moratoriums, etc on deposit and withdrawal.)

Disclaimer: Seek second opinion for specific security required on country to country transactions and on specialised trade transactions. Above applies in general to most banks.

Answer 2

1) Credit. It is a checking account. What if you write a cheque and you overdraft then walk away? You have then borrowed and not repaid. They can post this information on your credit report if needed. 2) Identification. This way they know who you are. They can verify you are really who you and your ID say you are. They use it to verify your identity in the future as well, if you don't have an ID or are on the phone. 3) Taxes. You receive a 1099 for any interest income. Tax info is always based on your social. Maybe if this was a business account you could use your EIN, but I can't say for sure. EIN's are easier to change and not as private as your social. Don't worry about it, the bank is not going to steal your identity.