If you want to pay someone or send someone money but don’t want to give them cash or write a personal check, a money order is a great option. Similar to a cashier’s check, it’s considered a safer and more secure form of payment than using a personal check. However, while a cashier’s check is a type of certified check issued directly by a bank, and is even more secure than a money order, money orders are generally more convenient and available in more locations, including the U.S. Post Office and grocery stores.
How Do Money Orders Work?
You can purchase a money order from a financial institution such as a bank or credit union, or through an issuer provided at certain locations like the U.S. Post Office or grocery stores. Most money orders have a limit of $1,000, so if you need to send more money than that, you’d have to purchase multiple money orders.
The authorized body or financial institution issuing the money order needs the payee’s name, sender’s name, and amount of money that can be cashed. A money order is not the same as a check, and therefore, they can be harder to trace. However, one upside is less personal information is required in order to send one. You should keep the receipt that comes with your money order until you’re certain that the money order has cleared.
Information and Materials You’ll Need
The money order requirements and format may differ slightly depending on which issuer you use, but whether you’re using the U.S. Postal Service (USPS), Western Union, MoneyGram, or another service, the process is similar to that of writing a check. When you’re ready to fill out a money order, you’ll need to have:
- The payee’s name
- The payment amount
- The payee’s address
- Other details, such as the payee’s account number
- A valid form of payment – cash, traveler’s checks or debit cards (credit cards may be accepted, but will incur an extra fee or interest)
Read More: The Required Information for a Money Order
1. Write the Payee's Name
Write the name of the person or business to whom you are sending the money order in the “PAY TO THE ORDER OF” field. Make sure to double-check for correct spelling and information, because you can’t change anything once the money order has been processed.
2. Fill out Your Own Info
You are the purchaser, so fill in your own information in the field that says “Purchaser,” “Sender,” “Remitter” or “From.” Some issuers, like Western Union, may require your full name and address, but others may only require your name. You should use your full legal name and current mailing address to fill out this section.
3. Sign the Front
Sign the front of the money order, but leave the back blank, because this is where the recipient will need to sign. Some money orders may provide space for a memo or note to denote the payment purpose, so it couldn’t hurt to fill that out, if it’s there. Double-check everything for accuracy, and then send the money order as you would a check.
4. Keep the Receipt
Keep the detachable receipt that provides your proof of purchase and tracking information so you can monitor your money order and confirm if and when it’s been deposited.
If you think the money order got lost, misplaced, or stolen, report it to the issuer immediately. Western Union, for example, can help you trace or refund a lost, stolen or damaged money order for a nonrefundable fee of $15 if you have your original receipt, and $30 if you’ve lost your receipt.
Where to Get a Money Order
One downside of money orders is that, unlike wire transfers, you can’t purchase or send them online. However, money orders are available at many convenient locations, including banks, financial institutions, credit unions, post offices and convenience stores, like Walgreens. Money orders must be purchased in-person.
To pay, you can use cash, a traveler’s check or a debit card. While some issuers may accept credit cards, they may be processed as a cash advance, incurring a higher interest rate, as well as fees, so keep that in mind. Not all issuers will accept credit cards as payment.
How Much Do Money Orders Cost?
The great thing about money orders is that they’re inexpensive. While prices vary depending on where you buy them, fees normally hover around the neighborhood of $1 to $2.
For example, Walmart offers the cheapest prices around, with a maximum fee of just $0.88 at most locations. The U.S. Post Office charges just $1.25 for money orders for amounts up to $500 and $1.75 for amounts up to $1,000. Western Union doesn’t have a set fee, but depending on the amount you send, you can expect to pay around $1 or $1.50.
Money orders issued by banks and credit unions typically cost more than these other options, as much as $5 to $10, and you’ll need to have an account with them, as well in order to purchase a money order.
It’s important to remember that most services don’t issue money orders of amounts greater than $1,000. So, if you wanted to send $2,000, for example, you’d need to pay two fees in order to send two money orders. For larger amounts, consider getting a cashier’s check instead, which may cost more than a money order (expect between $1 and $10), but may also be free, depending on your financial institution and level of service.
- Investopedia: Money Order
- Western Union: All About Money Orders
- The Balance: How Much Does a Money Order Cost?
- Payomatic Support: How Much Does a Western Union Money Order Cost?
- The Simple Dollar: How Do Money Orders Work?
- NerdWallet: How to Fill Out a Money Order Step-by-Step
- Western Union: How to Fill Out a Money Order
- Walmart: Money Orders
- The Balance: How to Fill Out a Money Order
- Smithsonian National Postal Museum. "American Express." Accessed Sept. 3, 2020.
- USPS. "Money Orders: The Basics." Accessed Sept. 3, 2020.