Making Sense of Money Orders
We live in an age of credit cards, PayPal and mobile payment apps that allow us to transfer funds quickly and easily. Still, some people do use money orders as a form of payment. If you aren't familiar with money orders or haven't had to cash one in awhile, you may need to do a little research to understand the best way to deposit one. Being prepared for, and knowledgeable about, the process of cashing a money order can save you time and hassle when you are juggling kids, errands and work schedules.
What is a Money Order?
A money order is a financial instrument similar to a check. It is printed on paper, and the recipient can deposit it into a bank account or cash it at a bank, retail outlet that cashes money orders, or through the business or organization that issued it. Many people are familiar with the money orders issued by the United States Postal Service, but most banks sell them as well, along with Western Union and some retail stores.
The difference between a money order and a personal or business check is that a money order has already been paid for in cash. This means that a money order can't be returned for insufficient funds. People who don't have checking accounts or credit cards often use money orders to make secure payments to other individuals or businesses. Some businesses require payment in the form of a money order or cashier's check to avoid having to deal with a personal check that ends up bouncing.
Some money orders are fraudulent: Scammers will print up a fake money order and hope that a bank or check cashing service will cash it, not recognizing the forgery until it is too late. Keep in mind that if you deposit a forged money order to your bank account, your bank will deduct the funds from your account, possibly leaving you with a negative balance and associated insufficient funds fees to deal with.
How Do I Cash a Money Order?
If you have a bank account, bring the money order to your bank and deposit it as you would a check: at a teller window or through the ATM. Keep in mind that each bank has different policies on the availability of funds, and you may not be able to access the value of the money order right away.
Not all ATMs are capable of recognizing money orders. Check with your bank to find out whether its ATMs or app can process yours.
Can I Cash a Money Order Online?
If you aren't near a bank or ATM, you may be able to deposit your money order to an account or prepaid debit card via a mobile app. Not all mobile apps accept money orders, however, so it's important to check your bank's website to confirm that the deposit is possible.
In addition, it's also a good idea to find out whether your mobile deposit will be available right away: Some institutions mandate a waiting period to ensure that the check or money order will clear.
What if I Don't Have a Bank Account?
Cashing a money order can be challenging if you don't have a bank account, but you may still have some options:
- Check the money order for the name of its issuer. If the money order is issued by a bank, and there is a branch of that bank in your area, the bank will cash it. You may need to present photo identification.
- Cash postal money orders at your local post office.
- If the money order was issued by a company such as MoneyGram or Western Union, cashing the money order should be straightforward. Both companies either operate stand-alone locations or have agents at currency exchanges and retail businesses located around the country. You can identify Western Union and MoneyGram stores and agents via their respective websites. Do call ahead, however, to confirm that the location cashes money orders.
- Some currency exchanges, also known as check-cashing stores, cash money orders.
- If there is a customer service number printed on the money order, call the number and ask if there are locations in your area that will cash it for you.
- Get a pre-paid debit card that allows you to deposit checks and money orders via ATM, mobile app, or at a retail partner store.
Some money order cashing services, including those at currency exchanges and retail stores, may charge a fee for cashing a money order. Ask about these charges before presenting the money order to the cashier.
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- Answers about Forgery and Fraud
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- Western Union. "Where Can I Cash a Money Order?" Accessed Jan. 14, 2020.
- Consumer Financial Protection Bureau. "How Quickly Can I Get Money After I Deposit a Check Into My Checking Account? What Is a Deposit Hold?" Accessed Jan. 14, 2020.
- Federal Deposit Insurance Corporation. "Expedited Funds Availability Act," Page VI–1.3. Accessed Jan. 14, 2020.
- Capital One. "What Is Mobile Deposit?" Accessed Jan. 14, 2020.
- Walmart. "Check & Card Cashing." Accessed Jan. 14, 2020.
- MoneyGram. "Common Scams." Accessed Jan. 14, 2020.
- Experian. "Can You Cancel a Money Order?" Accessed Jan. 14, 2020.
Lainie Petersen writes about business, real estate and personal finance, drawing on 25 years experience in publishing and education. Petersen's work appears in Money Crashers, Selling to the Masses, and in Walmart News Now, a blog for Walmart suppliers. She holds a master's degree in library science from Dominican University.