When someone asks for “guaranteed funds” in Canada, they mean one of three instruments: a certified cheque, a bank draft, or a money order. These are not interchangeable — real estate lawyers require a bank draft, government agencies sometimes specifically require a certified cheque, and money orders are capped at $999.99. Choosing the wrong one can delay a closing, get your application rejected, or leave you scrambling for an in-person branch visit the morning of your transaction.
The core distinction between the three comes down to who issues the instrument. A bank draft is written by the bank from the bank’s own account — you pay the face amount, the bank takes the funds immediately, and the resulting cheque is the bank’s obligation. A certified cheque is your personal cheque, stamped by the bank to confirm the funds are set aside in your account. A money order is prepaid at the point of purchase from Canada Post, a bank, or Western Union, and carries no link to a bank account at all.
For almost all large private transactions — real estate closings, private vehicle purchases, contractor deposits — a bank draft is the right choice. It is the most secure option, costs $7.50–$10 regardless of the face amount, and is accepted universally for large payments. For smaller payments under $1,000 where a payee needs guaranteed funds but you do not want to visit a bank, a money order from Canada Post is simpler. Certified cheques occupy a narrower use case: legal proceedings, immigration applications, and situations where the specific payment type is mandated.
Side-by-Side Comparison
| Feature | Certified Cheque | Bank Draft | Money Order |
|---|---|---|---|
| Issued by | Your account (bank certifies it) | The bank’s own account | Canada Post, bank, or Western Union |
| Maximum amount | No limit | No limit | $999.99 |
| Cost | $10–$25 | $7.50–$10 | $7.50 |
| Funds guaranteed | Yes — set aside in your account | Yes — withdrawn from your account to bank | Yes — prepaid at purchase |
| Security level | High | Highest | Moderate |
| Requires bank account | Yes | Yes | No (cash purchase possible) |
| Can be cancelled | Yes — with conditions | Yes — with original receipt | Yes — with receipt and ID |
| Where to get | Bank branch only | Bank branch only | Canada Post, banks, Western Union |
| Best for | Legal/government payments; court orders | Real estate, vehicles, large purchases | Rent, bills, mailed payments |
Costs by Bank
Bank drafts cost the same regardless of the face amount — a draft for $800,000 costs the same $7.50–$10 as one for $5,000. This makes them the most cost-efficient guaranteed payment method for large transactions. Certified cheques are roughly double the price at most banks without accounting for account-level fee waivers.
| Bank | Certified Cheque | Bank Draft | Notes |
|---|---|---|---|
| RBC | $15 | $8.50 | Waived with VIP Banking |
| TD | $15 | $7.50 | Both free with All-Inclusive Banking |
| CIBC | $15 | $7.50 | Waived with Smart Plus |
| BMO | $15 | $7.50 | Waived with Premium accounts |
| Scotiabank | $15 | $7.50 | Waived with Ultimate Package |
| National Bank | $12 | $7.50 | Lower certified cheque fee |
If you have a premium chequing account, bank drafts and certified cheques are typically included at no charge — check your account’s included services before paying the fee. For a one-off transaction, paying $7.50–$15 to guarantee payment on a $300,000 real estate deposit is essentially zero relative cost.
When to Use Each
The most common question is which instrument to use for a real estate closing: always a bank draft, made payable to the exact name your lawyer or notary specifies. Lawyers in Canada will not accept personal cheques or certified cheques for closing funds at most firms — confirm the exact requirements with your lawyer before visiting the bank.
Real estate transactions always require a bank draft. The amount is too large for a money order ($999.99 cap), and most real estate lawyers require the superior security of a bank-issued instrument rather than a certified personal cheque. Bring the exact payee name your lawyer gives you — a bank draft made out to the wrong name cannot be corrected without cancelling it and issuing a new one.
Private vehicle purchases from an individual seller are also best handled with a bank draft. The seller gets guaranteed funds with no risk of the payment bouncing or being reversed; you get a record of the transaction. For dealer purchases, most dealerships accept debit or financing — check before getting a bank draft.
Rent and security deposits can use a certified cheque, bank draft, or money order depending on the amount. For a security deposit over $999.99, a certified cheque or bank draft is required since money orders are capped. For monthly rent under $1,000, a money order from Canada Post is the easiest and cheapest option.
Immigration applications (IRCC) to Immigration, Refugees and Citizenship Canada specify acceptable payment methods on each form — some require certified cheques or bank drafts specifically, and personal cheques or money orders are not accepted for certain fee categories. Always check the current IRCC payment instructions for the specific application.
Court-ordered payments typically specify a certified cheque. Do not substitute a bank draft without written confirmation from the court or your lawyer that it will be accepted.
| Situation | Best Option | Notes |
|---|---|---|
| Real estate closing | Bank draft | Lawyers typically require it; no amount limit |
| Private vehicle purchase | Bank draft | Guaranteed funds; no cap |
| Security deposit (over $999.99) | Bank draft or certified cheque | Money order cap too low |
| Monthly rent (under $1,000) | Money order | Cheapest and simplest option |
| Immigration application | Bank draft or certified cheque | Check IRCC instructions for each form |
| Court-ordered payment | Certified cheque | Confirm with lawyer before substituting |
| Sending payment by mail | Money order | Safer than cash; no bank account needed |
| Paying a contractor (large) | Bank draft | Guaranteed funds; no cap |
How to Get a Bank Draft
Bank drafts require an in-person branch visit — they cannot be ordered online or through an app. Bring government-issued photo ID and know the exact payee name before you go. The process at most banks takes 10–20 minutes, though branch wait times at busy periods can be longer.
- Visit your bank branch during business hours with government-issued photo ID.
- Tell the teller you need a bank draft and provide the exact payee name (the legal name of the person, company, or firm you are paying).
- Specify the exact dollar amount.
- The funds are immediately withdrawn from your account.
- The bank issues the draft — review it carefully before leaving the branch to confirm the payee name and amount are correct.
- Keep the receipt. You will need it if you ever need to cancel or trace the draft.
A bank draft made out to the wrong payee name must be cancelled and reissued — there is no way to correct the name after issuance. Confirm the exact legal name with your lawyer, landlord, or payee before requesting the draft.
How to Get a Certified Cheque
- Write a personal cheque for the exact amount, leaving nothing blank.
- Bring the cheque and government-issued ID to your bank branch.
- The teller verifies you have sufficient funds and sets the amount aside in your account.
- The bank stamps or marks the cheque as “certified” and signs it.
- The funds remain held in your account until the cheque is cashed — they cannot be withdrawn.
How to Get a Money Order
Money orders are available at Canada Post locations, bank branches, Western Union locations, and some pharmacies and grocery stores. Unlike bank drafts and certified cheques, money orders do not require a bank account and can be purchased with cash.
- Go to a Canada Post outlet, bank branch, or Western Union location.
- Pay the face amount plus the fee ($7.50 at Canada Post) in cash or debit.
- Fill in the payee’s name at the counter — do not leave money orders blank.
- Keep the receipt stub. This is your only record of the transaction and is required to cancel or trace the money order.
Fraud Awareness
All three guaranteed payment methods are used in overpayment scams. The pattern is consistent: a buyer sends you a bank draft, certified cheque, or money order for more than the agreed amount, asks you to deposit it and send back the difference by wire transfer or e-Transfer, and the instrument is later identified as counterfeit. By then, your wire transfer is already sent and unrecoverable.
Protect yourself with three rules. First, never accept a guaranteed payment for more than the agreed price — legitimate buyers do not overpay and ask for a refund. Second, never send money to someone before the instrument has fully cleared and been confirmed as legitimate by your bank (not just showing as deposited — clearance can take 7–10 business days for suspicious instruments). Third, verify any instrument by calling the issuing bank directly using a phone number from the bank’s official website — not a number provided by the buyer.
| Instrument | Can Be Counterfeited | How to Verify | Common Scam |
|---|---|---|---|
| Certified cheque | Yes | Call issuing bank with cheque number | Overpayment — buyer asks for wire refund |
| Bank draft | Yes | Call issuing bank with draft number | Overpayment — same pattern |
| Money order | Yes (more common) | Call issuer with serial number | Overpayment — same pattern |