What is the Difference between Travellers check and cashiers check?

- A traveller's cheque is a payment instrument that is pre-paid and can be used instead of cash when travelling.

- It is a paper-based document that contains a specific amount of money and is signed by the issuer, usually a bank or a financial institution.

- Traveller's cheques are popular among travellers as they are considered safer than cash, especially when travelling to foreign countries.

- When using a traveller's cheque, the user signs it in the presence of the person accepting it (such as a merchant or a hotel), who then verifies the signature against the one on the cheque and countersigns it.

- The person accepting the cheque may require additional identification, such as a passport, to ensure the authenticity of the traveller's cheque.

- Traveller's cheques can be exchanged for local currency at banks, exchange bureaus, or other authorized locations.

- Some traveller's cheques may charge fees or have expiration dates, so it's important to check the terms and conditions before purchasing them.

Cashier's Cheque:

- A cashier's cheque is a payment instrument issued by a bank that guarantees the funds are available and will be honoured upon presentation.

- Unlike personal cheques, which draw funds from an individual's bank account, a cashier's cheque is issued by the bank itself, making it a more reliable and secure form of payment.

- When obtaining a cashier's cheque, the individual requesting it must have sufficient funds in their account or make a cash payment to cover the amount of the cheque.

- The bank then deducts the amount from the individual's account or receives the cash and issues the cashier's cheque, which is signed by a bank representative.

- The recipient of a cashier's cheque can deposit it into their bank account or cash it at a bank or other financial institution.

- Cashier's cheques are often used for larger transactions, such as buying a house, paying rent, or making a significant purchase, as they provide a secure form of payment that guarantees the funds are available.

- The fees for obtaining a cashier's cheque may vary depending on the bank and the amount of the cheque.

Key Differences:

- Issuance: Traveller's cheques are issued by banks or financial institutions, while cashier's cheques are issued by banks.

- Guarantee: Traveller's cheques are not backed by the issuing bank, while cashier's cheques are guaranteed funds by the issuing bank.

- Use: Traveller's cheques are primarily used for travelling and are designed to be used in different countries, while cashier's cheques are used for various transactions, including significant purchases and payments where a secure form of payment is needed.

- Security: Traveller's cheques offer a level of security as they are not directly linked to a bank account and can be replaced if lost or stolen, whereas cashier's cheques provide a high level of security as they are guaranteed by the bank and cannot be easily reversed or cancelled.

- Fees: Traveller's cheques may have fees associated with their purchase and use, such as issuance fees and exchange fees, while cashier's cheques may also have fees, but these typically depend on the bank and the amount of the cheque.

- Acceptance: Traveller's cheques may not be as widely accepted as cash or credit cards in some countries, while cashier's cheques are generally accepted by banks and other financial institutions.