Money Order vs Bank Draft: Key Differences, Fees & When to Use
A Money Order is a prepaid paper voucher you buy at post offices or stores; a Bank Draft is a cheque drawn by your bank, paid from its own funds—both guarantee the recipient gets paid, but the issuer and risk differ.
People swap the names because both feel “as good as cash” and are used when personal cheques look sketchy—yet one comes from a corner shop, the other from a marble lobby, and that shapes trust.
Key Differences
Money Orders max out around $1,000, cost $1–$5, and need no bank account. Bank Drafts have no upper limit, cost $7–$15, require an account, and carry the bank’s credit instead of the buyer’s cash.
Which One Should You Choose?
Rent deposit or small gift? Grab a Money Order—fast, cheap, no bank visit. Buying a used car or putting a down-payment on a condo? A Bank Draft screams “serious buyer” and won’t bounce.
Examples and Daily Life
Paying a landlord who insists on “guaranteed funds”? Slip a Money Order under the door. Sending your kid’s tuition abroad? The bursar’s office asks for a Bank Draft in Canadian dollars—your bank prints it, kid stays enrolled.
Can either be canceled?
Money Orders can be refunded if lost and unused; Bank Drafts can be canceled only with the bank’s help and may take weeks.
Are they traceable?
Yes—both carry serial numbers. Money Orders use purchase receipts; Bank Drafts appear on your bank statement.