What is the Difference Between Postal Order and Money Order and Cheque?
🆚 Go to Comparative Table 🆚Postal orders, money orders, and cheques are all financial instruments used for sending or receiving payments, but they have some differences:
- Postal Order: A postal order is a pre-paid certificate issued by a national postal system, similar to a cheque. It is used for sending money through the mail and is not a legal tender. Postal orders are purchased directly from a national postal system, such as the US Postal Service or the Post Office in the United Kingdom.
- Money Order: A money order is a secure payment method issued by banks and financial institutions. It is an order for a specific sum of money, usually purchased with cash at a bank or post office, that can be used to make payments. Money orders are produced by independent financial service providers and may be purchased at various locations, including supermarkets or drugstores.
- Cheque: A cheque is a written order directing a bank to pay a specific amount of money to the person named on the cheque. It is a legal tender and can be issued by anyone with a bank account. Cheques can be bounced, cancelled, or paid, and the person issuing a cheque has the right to cancel it if they feel they have made a mistake.
In summary, a postal order is a pre-paid certificate issued by a postal system, a money order is a secure payment method issued by banks or financial institutions, and a cheque is a written order directing a bank to pay a specific amount of money.
Comparative Table: Postal Order vs Money Order vs Cheque
Here is a table comparing the differences between Postal Orders, Money Orders, and Cheques:
| Feature | Postal Order | Money Order | Cheque |
|---|---|---|---|
| Issuing Entity | Postal Service | Financial Institution | Individual |
| Payment Method | Pre-paid certificate | Pre-paid certificate | Signed document |
| Purchasing Place | Post Office | Banks, supermarkets, drugstores | Banks |
| Acceptance | More secure, less prone to forgery | Less secure, more prone to forgery | Can be bounced, cancelled, or paid |
| Cashing | Can be cashed at the post office or deposited into a bank account | Can be cashed at various locations or deposited into a bank account | Cashed at the bank or deposited into a bank account |
| Limitations | Generally lower maximum amount | Generally higher maximum amount | No fixed maximum amount determined at the time of issuance |
| Fee | Lower fee | Lower fee | Higher fee |
Postal orders are issued by national postal systems and can be purchased directly from a post office. They are similar to cheques when crossed but become as good as cash when uncrossed. Money orders are issued by banks and financial institutions and can be purchased at various locations, including supermarkets and drugstores. They are generally considered less secure than postal orders. Cheques are signed documents issued by individuals and can be bounced, cancelled, or paid. They are typically cashed at banks or deposited into a bank account.
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