A money order is a safe alternative to cash or personal checks, especially if you need to mail a payment. You specify who will receive the money order, and both you and that person must sign it for it to be valid.
The money is guaranteed by a third party, such as the post office, Walmart or Western Union. (These are also places where you can get money orders.) The cost usually ranges from under a dollar to several bucks, which can be a bargain compared with some other ways of sending money, especially internationally.
When should I use a money order?
There are times when using cash or personal checks can put you at risk, or they aren’t accepted for payment. Here are five examples where money orders are the best payment method:
- You need to send a payment more securely. Unlike checks, money orders don’t include your bank account number.
- You don’t have a checking account and need to pay bills. Since money orders require you to pay in advance, the money isn’t tied to any bank account and can be sent to other people. If you want to make everyday purchases at retailers, however, an easier solution is to use an affordable prepaid debit card.
- You’re worried about bouncing a check. Because money orders are prepaid, they can’t be rejected for insufficient funds and aren’t subject to the fees that come with bouncing a check.
- You’re mailing money. A money order helps ensure that only the recipient can use it, unlike mailing cash.
- You’re sending money internationally. Not all money orders work abroad, but U.S. Postal Service money orders can be sent to 28 countries. It’s an alternative to a wire transfer, which is faster but usually more expensive.
» Need to quickly send money abroad? Read our best ways to wire money internationally
Where do I get a money order?
Here are some of the top places to get a money order, beginning with the cheaper options.
- Walmart: The big-box store offers money orders from MoneyGram, a money order provider, at a cost of 70 cents each for values up to $1,000.
- Money transfer agents: You can buy money orders from companies such as Western Union and MoneyGram at convenience stores, drugstores, supermarkets, check-cashing outlets and elsewhere. The Western Union money order fee, as an example, is around 99 cents; charges vary by location. Single money orders are usually limited to less than $1,000.
- U.S. Postal Service: Money orders to be sent within the United States are $1.20 for up to $500; $1.60 for amounts over $500 up to $1,000. There’s one exception: Military money orders, issued by postal military facilities, are 40 cents. An international money order with a value of up to $700 costs $8.25.
- Banks and credit unions: Financial institutions sell money orders for around $5 each, with values typically up to $1,000. They often waive fees for customers with premium accounts.
» Lost money order? Find out how to claim your cash
You can typically pay for a money order with cash or a debit card, but there may be other options depending on the place. Just steer clear of using a credit card, because your issuer might consider it a cash advance and charge you extra.
If you need an amount that’s above $1,000, then a cashier’s check is your best option. It may cost more money, but it also offers you more protection. Read NerdWallet’s primer on cashier’s checks for more information.
Where can I cash a money order?
Your best bet is to cash a money order at the same entity that issued it, whether that’s a bank branch, post office or other location. Check-cashing locations, convenience stores and grocery stores can be alternatives, but watch out for fees. Wherever you go, you’ll probably need to show identification.
Your best bet is to cash a money order at the same entity that issued it, whether that’s a bank, post office or other location.
If you don’t need the money right away and you have a bank account, consider depositing it. Banks accept U.S. Postal Service money orders as they would regular checks at branches, ATMs or even on a banking app with a mobile check deposit function. Don’t forget to sign the back of the money order before depositing.
Tips when sending money orders
- Keep the receipt as proof of payment. The receipt will be a carbon copy of the money order or a paper slip recording the information entered on the money order.
- Track your money order. Your receipt will also have a tracking number that you can use to verify that the money order got to the intended recipient. If any problems arise, contact the place where you bought the money order to get help.
- If the money order is lost or stolen, or if you filled in the wrong information, you may be able to cancel it and get a replacement or refund. You’ll need to bring your receipt and the money order itself, if you have it, to the place where it was purchased. But it could cost a fee. For example, Western Union charges $15 to replace a money order.
Updated Jan. 19, 2018