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Money Order: What Is It, How Does It Work, How to Get One

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Updated April 11, 2024

A money order is a financial instrument that allows you to pay bills or reimburse friends and family without having to write a check or use cash. You can get one from a bank, but you don't need a bank account to use it. Many people use money orders as an alternative to cash or checks as a safe, secure way to make payments. If you need to purchase a money order or someone has given you one as payment, it helps to know a little about how they work.

How do money orders work?

Money orders allow you to exchange cash or funds in your bank account for a paper document that has monetary value. The person buying the money order decides how much value it should have, though the issuer may cap the maximum amount. For example, the U.S. Post Office limits a money order to $1,000.

When you purchase a money order, you pay the face value amount using cash or a debit card. You may also pay a small fee to buy the money order. Once the person or business to which you're giving the money order receives it, they can take it to their bank to cash or deposit it.

A money order isn't a check, as it's not tied to a bank account. You can buy money orders through your bank or credit union, but the following types of businesses also sell them:

  • Grocery stores.
  • Post offices.
  • Convenience stores.
  • Check-cashing stores.
  • Western Union outlets.
  • Walmart stores.

Advantages and disadvantages of money orders

A money order has its pros and cons. Weighing both can help you decide if it makes sense for you to use one.

Here are some of the main benefits of a money order:

  • You don't need a bank account to purchase or receive one.
  • It’s available for sale at a wide variety of locations.
  • It’s a safe and secure payment method.
  • It’s guaranteed by the bank, meaning that it won't "bounce" like a check could.
  • Funds added to a money order are trackable, allowing you to see when one has been cashed.

Here are some of the drawbacks of using a money order:

  • There may be limits on how much money you can add to one.
  • There is usually a fee to purchase one, though it may be less than what you'd pay for a cashier's or certified check.
  • If one is lost or stolen, it can be difficult to get the face value amount refunded to you.
  • The options for purchasing one online are limited.
  • Money orders are often utilized in online sales scams; if you fall victim, you may not be able to get your money back.

Note that if you plan to take a cash advance from a credit card to purchase a money order, it can trigger a cash advance fee and a higher annual percentage rate (APR) than for regular purchases on the card.

How to get and send a money order

If you need to pay a business or person using a money order, the first step is finding a seller. You might start with your current bank or credit union. If you don't have one, you could try an online search for “money order near me” to get local results for retailers that sell them. If all else fails, you could always visit your local post office to purchase one.

Once you've decided where to buy the money order, go there with your funds in hand. Again, you should be able to use cash or a debit card to make the purchase.

Here are the general instructions for filling out a money order:

  • Let the issuer know how much you want to put on the money order.
  • Write the name of the person or business you are paying on the line that says "Pay to" or "Pay to the Order Of."
  • Add your name and address in the section marked "From." Depending on where you buy the money order, this may also say "purchaser," "remitter," or "sender."
  • Write the reason for payment on the memo line, including your account number if you're using a money order to pay a bill.
  • Sign the money order on its front in the area designated for the purchaser's signature.

You should be given a receipt when you purchase a money order; if you aren’t, ask for one. This way you have documentation of the purchase in case the money order is lost or stolen and must be refunded or replaced.

Once you have filled out the money order, you can deliver it to the recipient. You might hand it off in person or mail it. In the latter case, it’s a good idea to request signature confirmation to ensure it's delivered to the right person or business.

As mentioned, you'll typically pay a fee to purchase a money order, usually around $5 or less. You may want to check the fees at different sellers to see how they compare.

Where can you cash a money order?

Generally, you can cash a money order where you purchase it. This includes the post office, convenience stores, banks, Western Union locations, and Walmart. Note that Walmart only cashes money orders from Western Union and MoneyGram.

The process for cashing a money order can depend on where you're doing it. In most cases you'll need to:

  • Take the money order where you plan to cash it and present it to the appropriate person (i.e., a cashier, customer service representative, postal worker, bank teller, etc.).
  • Present a photo ID, such as a driver's license or state ID card.
  • Sign the money order in the spot marked for your signature in the presence of the person who's cashing it for you.
  • Pay a cashing fee.

If you'd like to deposit a money order into a bank account, take it to your bank, fill out a deposit slip, present your ID to a teller, sign the money order in front of them, and hand it over to be added to your account.

Money orders vs. cashier's checks

A cashier's check is another way to make payments without writing a check from your bank account or paying cash. When you want a cashier's check, you give the bank the appropriate amount of funds, along with any fee that's required. It then issues a check for the amount you specify against its own funds instead of yours.

You can use a cashier's check to pay bills or make guaranteed payments to someone. For example, if you're buying a car from your cousin, you might give them a $10,000 cashier's check to cover the amount. They could then take that check to their bank and cash or deposit it.

Let’s look at how cashier’s checks and money orders compare with each other.

Money orderCashier's check
Can be purchased at banks and some other locations

Guaranteed by the funds you use to purchase it

May be limited to $1,000

Fees may range from under $1 to $5

Secure alternative to cash or personal checks
Issued by and purchased at banks

Guaranteed by the bank's funds

Banks and credit unions may set higher maximum limits than for a money order

Fees may range from $5 to $15, depending on the bank

Considered to be more secure than a money order

TIME Stamp: Money orders are a convenient way to send payments

A money order can help you send funds when you don't have a bank account or want an alternative payment option. It may be best used when sending payments to businesses or people you know. Likewise, you may want to use caution when accepting a money order from a stranger; make sure the payment is legitimate first.

Frequently asked questions (FAQs)

Do you need a bank account to cash a money order?

No. It's possible to cash a money order wherever it was issued. Keep in mind that anytime you're cashing one, there may be a fee to do so.

Is a money order the same as cash?

Money orders are often viewed as being the same as cash because they have an exact face value. However, you couldn't use a money order in a store as payment. You'd first need to cash it in order to access the funds.

Can anyone cash a money order?

Anyone can cash a money order that's made out to them if they have the appropriate form of government-issued identification. If a minor child receives a money order, they'll need a parent's help to cash it.

Do you need ID to cash a money order?

If you don't have an acceptable form of ID, you may need to sign the money order over to someone else who does. They can then cash it and give the money to you.

Can you tell who cashed a money order?

Yes, you can, through the serial number that's attached to it, which should be printed on the receipt that you were given upon purchase. If you don't have the number, you won't be able to tell if or when it was cashed.

What happens to a money order if it is not cashed?

If a money order isn't cashed, the face value amount remains on it, as money orders don't have an expiration date. If you send a money order to someone and they don't cash it, you can ask the issuer to cancel it and return the funds to you.

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