Money orders: when, where, and how
zobiaMoney orders: when, where, and how
When you need to make or accept a payment, but cash, check, and wire transfers don't fit the bill, a money order is a safe and convenient solution. Available at over 200,000 locations across the US, cash orders are also easy to buy or cash.
A money order is basically a paper check that can't bounce because it's prepaid. You can buy one at any US Post Office, or at Western Union or MoneyGram outlets, such as those found in supermarkets, pharmacies, and other grocery and convenience chains. Most banks, credit unions, and check cash stores also offer money orders.
When should I use a money order?
n cases where it is not appropriate, or even feasible, to pay by cash, check, or digital app, a money order may be the best answer. Like a check, money orders are written directly to individuals or businesses by name, requiring an endorsement and identification to funding. This makes money orders much more secure than cash, protecting funds in the event of loss or theft. How Long Is A Money Order Good For?
key takeaways
- Money orders are an easy way to securely exchange funds when paying in cash is impractical, when the use of a personal check is not accepted or desirable, and when non-digital payment is required.
- You can get money orders at many places like the post office, most banks, and Western Union outlets at CVS, Walmart, and 7-Eleven stores.
- There are pros and cons to using money orders.
- While cash orders are generally cheap, there is always a purchase fee and sometimes a refund fee to the recipient.
- Money orders are an attractive tool for scammers, so it's important to check the visual security features of any money order you receive.
Money orders have played a central role in American history. During the Civil War, thieves robbed post offices and deliveries to confiscate cash shipped across the country. At that point, postmaster Abraham Lincoln had a blanket solution: money orders.
While personal checks offer similar security benefits, prepaid money orders have the advantage. Assuming you have a legitimate money order, it is accepted as a risk-free form of payment because the sender has already provided the funds.
In contrast, a bona fide personal check assumes there are sufficient funds or overdraft protection in the sender's bank account to cover the check. If not, the payment bounces and the recipient falls short, often paying a bank fee on top of that.
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Safer than cash from theft or loss
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It is not possible to bounce as a check for insufficient funds of the prepaid amount
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Cheaper than a bank check or cashier's certificate
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Requires a personal visit to a money order vendor
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You must pay a purchase fee, unlike personal checks
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Not all banks allow mobile deposit
Due to the advantages of cash orders over cash and check, they are preferred or required in many cases, for example:
- The recipient is not comfortable trusting a personal check, due to a lack of knowledge of the sender or previous poor experience with prior payments.
- The sender does not want to submit your address or verify your account number.
- It is vital to make the payment without the risk of rejection without sufficient funds.
- The payer does not have a checking account and cash is not practical.
Cashiers and certified checks are possible alternatives. But banks often charge higher fees for the extra security. And you have to go to a bank during banking hours to get them, which offers fewer options for time and location. So if a money order can handle the job, it may be a more flexible and affordable option.
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