A money order is essentially a paper check that you prepay, so it can’t bounce like a check can. Money orders guarantee the payment will go through which can give a payment some much-needed validity.
If someone hasn’t bought a money order before, they may not know how the process works. Keep reading to learn what a money order is and how to fill out a money order, step by step.
What Is a Money Order?
Unlike a check, a money order isn’t linked to the payer’s checking account. Instead, the money order is paid for upfront with cash. The payer must buy the money order and this can be done at select financial institutions or the U.S. Postal Services.
Some people request payments be made by money order because the money order can’t bounce like a check paid from your checking account could. If the money order is real and valid, then the funds are guaranteed because the payment was made at the time of purchase.
Money orders may be viewed as a bit old-fashioned, but they’re still around for a reason — they’re reliable.
Recommended: What Is a Cashier’s Check?
What Is Needed to Fill Out a Money Order?
Not sure what information you’ll need to fill out a money order? Generally, payers should have the following information on hand when they’re ready to buy a money order.
• Payee’s name (must be spelled the same as the name on their ID)
• Payee’s address
• Your name and address
• Memo information (payment reason, account number, etc.) is optional
5 Steps to Filling Out a Money Order
When you’re ready to fill out a money order, you can purchase one at locations such as:
• Banks and credit unions
• Post offices
• Grocery and convenience stores
• Walmart and other mass retailers
• Check-cashing companies
When you buy one (whether paying in cash, with a debit card, or possibly buying a money order with a credit card), you’ll need to provide the payment amount for the money order, and then follow these steps to fill it out:
Step 1. Add the Payer’s Name and Address
Write the name of the individual or business that the payment is going to. It’s vital that the payee’s name is spelled correctly, because when they go to cash a money order (they have a few options for where they can cash their money order), they will have to show their ID to confirm they’re who the money order is for.
Step 2. Write Your Name and Address
The payer then typically needs to write down their name and address in the purchaser section of the money order. Again, this is a step that requires care; write clearly and accurately.
Step 3. Add an Optional Memo
If the payer wishes, they can add additional info in the memo such as what the money is going to be used for or their account number (this is more common when paying bills).
Step 4. Sign the Money Order
To make a money order official, the payer has to sign it.
Step 5. Keep the Receipt
It’s important to hold onto the receipt for a money order until the payer confirms that the payee received and cashed or deposited the money order. This is a crucial step that shouldn’t be skipped. If for some reason the money order is lost, stolen, or involved in a form of fraud, then having the receipt is necessary in order to cancel the money order.
How Long Does It Take for a Money Order to Go Through?
It can take from a few hours to two weeks for a money order to go through. If you make funds available and the payee goes to a pickup location, the process might only take a couple of hours. If a person cashes a money order and transfers it to a bank account, it could take a couple of days. Or it might take longer if mailed and then cashed. (Payment forms such as a wire transfer can be faster, but that requires the payer to have a bank account.) If someone sends a payment via money order and it hasn’t been cashed or deposited within two weeks, then it may be time to cancel the money order.
Typically, money orders only take a few days to arrive via mail, but holidays and weekends can cause delays. The recipient also has to take the steps necessary to deposit or cash the money order. Though they are typically good indefinitely, they could potentially start losing value after an extended period of time due to service charges.
Recommended: How to Transfer Money from One Bank to Another
Importance of Filling Out a Money Order Correctly
It’s vital to fill out a money order correctly, as it’s not possible to change the details on a money order after completing it. It’s especially important to correctly write the name of the recipient since the name on the money order needs to match the name on their ID in order to cash it.
It’s also important to fill out a money order as soon as possible when you buy it. If you purchase a money order and it gets lost or stolen before you fill it out, the person who obtains it could fill it out to themselves and cash it.
How Much Does It Cost to Send a Money Order?
How much it costs to send a money order depends on where the money order is purchased. It usually only costs $1 to $5, and how much it costs can also depend on the value of the money order. For example, if you obtain a money order at a U.S. Post Office at the time of publication, the fee will be $2.35 if the value is up to $500 and $3.40 if the value is between $500.01 and $1,000, the maximum amount available.
Sending a money order internationally can also increase costs.
Recommended: ACH vs Wire Transfers: Which Should You Use?
The Takeaway
Money orders can offer an affordable and convenient way to send someone a guaranteed payment — unlike a check which can bounce. Filling out a money order typically involves writing the payee’s and payer’s name and address, adding a memo if desired, and signing the money order; keeping the receipt is an important step, too.
FAQ
What can you use a money order for?
Money orders can be used to make a variety of different types of payments. They can come in handy for making purchases when someone can’t write a check because they don’t have a checking account. A good use of a money order can be paying rent, since the landlord knows the payment is guaranteed, but many different vendors accept money orders, and it can be a convenient way to make international payments.
What are some alternatives to money orders?
If someone doesn’t want to buy a money order, they have a few alternative payment options available to them like a cashier’s check, which is guaranteed by the financial institution issuing it. Other options include wire transfers and digital payment services.
How long does it take to fill out a money order?
It generally only takes a few minutes to fill out a money order. To make the process go faster, it’s a good idea to know the exact spelling of the recipient’s name to add to the money order, as well as their address. Having the right amount of cash on hand to purchase the money order can also make the transaction go swiftly.
About the author
Jacqueline DeMarco
Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.
Photo credit: iStock/Image Source
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