The question comes from reading this answer.
I've heard these terms used somewhat interchangeably, but I have no idea what the differences are.
What's the difference between a certified check, a cashier's check, a money order, and a bank draft?
Many of these products are similar in nature and often depend on the issuing bank.
Cashier's Check Are checks signed and guaranteed by the bank. This means the funds are coming from the bank instead of your account -- which usually means they immediately take the money from your account. This is usually the most secure of the options and usually doesn't have many restrictions.
Certified Check Are checks signed by the customer, certified by the bank that you have enough funds and that your signature is genuine. Usually, but not always - the bank will set aside the funds.
Bank Draft Similar to a certified check but the bank will set aside the funds until the bank draft is used. Generally used in transactions involving larger sums.
Money order It's a payment order similar to a certified check; however, it needs to be prepaid. Also money orders may have maximum face values allowed.
I found a good description of these on the Laurentian Bank website. Very similar to Abraham's answer, but the details are a little different (perhaps because it's Canadian).
Certified cheque: A cheque which has been certified by the bank that the funds to be drawn are available and locked in for the sole beneficiary. This type of payment is guaranteed in case of theft, loss or destruction. Certified cheques can be entirely replaced after investigation (may be subject to a fee).
Official cheque: As for the certified cheque, the official cheque is guaranteed by the bank against theft, loss or destruction. This type of cheque is different because it will be automatically and fully reimbursed within a 30 to 90-day period. If the amount is over $1,000, fees will be higher than those of the certified cheque.
Money Order: The money order is also a bank-guaranteed payment in case of theft, loss or destruction. As with the official cheque, it will be replaced or totally refunded within a 30 to 90-day period. Its difference resides in the fact that the maximum amount is $1,000 and it can be issued in US dollars.
Bank draft: A bank draft is the ideal guaranteed payment vehicle for all your foreign currency transactions. It’s guaranteed against theft, loss or destruction and will be replaced or totally reimbursed within a period that varies according to the currency. If you are an immigrant or an emigrant or if you make purchases outside of the country, you could require this payment vehicle.
Thank you for your interest in this question.
Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).
Would you like to answer one of these unanswered questions instead?