The number of people paying by cheque has taken a dramatic dip in the era of internet and mobile banking, yet bank cheques remain a relatively safe and easy way to pay.
Bank cheques are drawn straight from your account and remove the need to lug around large wads of cash, which is ideal if you’re placing a downpayment on a new home or buying a secondhand car. However, this convenience comes at a cost.
Financial site Mozo compared the prices of bank cheques issued by the major banks with those from other institutions such as credit unions and building societies and found charges vary from $5 to $15.
Fees can also range within banks, depending on whether the cheque is issued online or in a branch.
We found Commonwealth Bank and Citibank among the most expensive for bank cheques, slugging customers with a $15 fee apiece, tailed by NAB at $12 and ING Direct at $11.
The fees were relatively lower at the smaller end of town with non-banks Gateway Credit Union, Hunter United and Newcastle Permanent all charging customers $5 for a standard bank cheque.
Of the big four banks, we found the cheapest was Westpac, which charges customers as little as $5 for issuing a bank cheque online. For those who prefer to go into a branch, Westpac and ANZ were found to offer the best value with an issue fee of $10.
These fees might seem miniscule compared with the other banking fees you pay but the reality is that they can add up over time, especially if you need to pay this way regularly.
In this case it would be worth checking with your bank if you are able to request a bank cheque online for a smaller fee.
For those looking for an alternative to bank cheques, money orders are usually issued and payable at a bank or post office and offer a more secure option than sending cash in the mail.
For a standard money order up to $5000, Australia Post charges $8.95, which is lower than what many banks charge for a bank cheque. The price is even lower if you want an online money order.
Mozo’s comparison found Australia Post to be much cheaper than money transfer agents such as Western Union and MoneyGram, whose fees vary depending on the amount you want to send.
While bank cheques and money orders are convenient payment options, money orders are generally capped at around $5000.
This means they aren’t as practical as bank cheques in situations where you need to pay large sums.