About Payment Instruments for Special Needs.
There are four types of payment instruments that you might find useful from time to time.
Traveler’s checks are issued by large financial institutions (such as American Express, Visa, and MasterCard) and sold through various outlets. They are accepted almost everywhere. Purchasers typically pay a fee of 1 percent of the amount of the traveler’s checks written in specific denominations (Rs 50,000, Rs 100,000, etc.) and in many foreign currencies. All traveler’s check companies guarantee replacement of lost checks if their serial numbers are identified.
A money order is a checking instrument bought for a particular amount with a fee assessed based on the amount of the order. Many financial institutions including Indian Postal Service sell money orders.
A certified check is a personal check drawn on your account on which your financial institution imprints the word certified, signifying that the account has sufficient funds to cover its payment. The financial institution simultaneously places a hold on that amount in the account until the check clears. Banks or financial institutions may charge a small fee for issuing a Certified Check.
Some payees insist on receiving payment in the form of a banker’s check drawn on the account of the financial institution itself and, thus, backed by the institution’s finances. To obtain such a check, you would pay the financial institution the amount of the banker’s check. It is also known as Banker’s Draft.
Both cashier’s and certified checks are secure forms of payment. However, a cashier’s check is generally regarded as the safer bet since the funds are drawn against the bank’s account, not an individual person’s or business’s account. Plus, certified checks do not have the same watermarks that cashier’s check have, making them slightly easier to fake.