Difference Between Postal Order and Money Order and Cheque

邮政汇票vs Money Order vs Cheque

What do you do to send money to another person if you do not have an account in your name with the cheque book facility? Use a money order or a postal order, you would say. It is true, but this doesn’t point out the differences between the three financial instruments; postal order, money order, and cheque. This article attempts to highlight the features of all three to enable people to use one of these in suitable circumstances.

Money Order

You need to buy a money order from a post office if the person whom you ordered an item insists on having it rather than a cheque. Money order is available from post offices upon payment of the value of the money order plus commission that is applicable. A money order is as good as cash, which is why many traders prefer it over cheque that takes longer to get cleared, and also has a chance of being dishonored sometimes.

Interestingly money order is not an invention of any government or post office. It was introduced by a private firm in UK in 18th century, but fees being charged were too high thus, not making it successful. Later, post office overtook the system, and reduced the commission, making money orders very popular.

邮政汇票

Postal order is also called postal money order, and is frequently used by people to send money inside envelopes. They are similar to cheques when crossed but become as good as cash when uncrossed. This is because a crossed postal order needs to be deposited in the bank account of the recipient, whereas an uncrossed postal order can be cashed by anyone.

Cheque

A cheque is a bill of exchange that is used by a person having a bank account as a method of making payment to others (individuals as well as companies). Holder of the account is called drawer, while the person or company whom he makes payment is called payee. The bank upon whom the cheque is drawn is called drawee. In fact, a cheque is an order by the person to his bank to make a specified payment to a person or a company. Cheques obliterate the need to carry cash just as credit cards and debit cards do, though cheques are not accepted by unknown vendors.

When you give a cheque to a person, he needs to deposit it in his bank account and it takes 2-5 days for the amount to show up in his account depending upon local or outstation cheques. A cheque can be bounced, cancelled or paid, finally. The person issuing a cheque has the right to cancel it, if he feels he has made some wrong entry in the cheque. A cheque is said to have bounced when there is insufficiency of funds in the account of the person issuing the cheque. Bouncing of cheque is considered to be a criminal offence.

What is the difference between Postal Order and Money order and Cheque? • While all three instruments namely cheque, money order, and postal order continue to be used by people, it is cheque that has gained ascendancy in use, allowing people to make and receive payments like a bill of exchange. • With online payments and electronic transfer of funds becoming popular, both postal order and money order have lost much of their sheen, though there are still instances when payment through these instruments is required to be made.