In an age of computerized payment alternatives, the modest money order may appear archaic. When you can send and receive money via an app or pay with a mobile wallet or contactless credit card, why then do you need a money order? Money orders may no longer be a prevalent method of payment, yet they continue to fill a crucial purpose that other forms of payment cannot. Here’s what you need to know about money orders, their services, and how to fill out a money order.
What is a Money Order?
A money order (MO) is a certificate that allows the stated payee to receive cash on demand, usually issued by a government or banking institution. This term is similar to check-in in that the person who purchased it has the ability to halt payment.
They are easily accepted and converted to cash, and they are frequently used by persons who do not have access to a traditional bank account. These instruments are an accepted method of payment for modest debts, both personal and business, and can be obtained from most banks for a minimal service fee.
American Express began issuing money orders in 1882, and they later became known as traveler’s checks.
How does Money Order Work?
While purchasing a money order, the purchaser must fill out a form with the receiver’s name and the amount that the recipient should receive. Most money orders have a $1,000 maximum restriction. As a result, if a buyer needs more than the specified limit, he must place numerous orders. Make sure to thoroughly fill out the money order; it’s a one-time purchase that must be documented.
The financial institution or authorized entity services that provide the money order to the payer will know who the payee is, who the issuer is, and how much money can be cashed. The fees charged to the payee are not included in this cash amount. When purchasing money orders, consider all charges. Money orders are typically more expensive to issue at a bank or credit union than at a convenience shop.
When a buyer pays for it, he or she receives a receipt that includes the money order’s serial number. This information should be preserved until the purchaser is confident that the MO’ has cleared. Tracing a MO’ without a receipt can be difficult, if not impossible.
Benefits of using a Money Order
Money orders can be a convenient alternative to cheques or cash when paying payments, consolidating debt, or making major purchases.
They’re a safe paper choice for individuals who don’t want their payments to bounce – because they’re prepaid, they can’t be denied for insufficient cash. Money orders are also not required to be acquired using a bank account because they can be obtained without one, for example, with cash.
Furthermore, when you prefer or are compelled to transfer money through the mail, money orders are a good alternative to electronic payments. They do not contain any bank account information, therefore it will not fall into the wrong hands.
How do you get a Money Order?
Money orders are sold by a variety of institutions. These are some examples:
- The United States Postal Service (USPS)
- Several retail banks, for example, Wells Fargo
- Certain retailers, such as pharmacies, supermarkets, big-box stores, and convenience stores
- Check-cashing and payday loan establishments
Prepare a payment method for both the face value of the MO’ and the fee. When you buy a money order from your bank, you may usually pay for the face value of the MO’ as well as the charge with funds from your checking or savings account.
How to Send a Money Order
Send a money order the same way you would a check. Put the MO’ in an envelope, write the recipient’s address and your return address on the front, and then add postage. You can also hand up a MO’ in person.
How to Send an International Money Order:
International money orders allow you to send money to someone outside of the United States, but the purchase limitations and costs differ from those of domestic money orders. For example, the USPS has a $700 purchase limit for foreign money orders ($500 for orders to El Salvador or Guyana). There is a $12.25 issuance fee plus a processing fee that varies per recipient nation. Upon cashing or depositing the MO’ in their native country, the recipient may be charged costs.
How and Where to Cash a Money Order
A money order can usually be cashed at your bank, the issuer, some retailers, cash-checking stores, and other institutions, however, there may be a cost.
Cashing a MO’ at the issuing institution usually results in the lowest fees. Money orders are frequently free to deposit into your bank account.
When depositing or cashing a it, you must endorse it on the back. Do not sign the MO’ until you are ready to cash or deposit it—you may be required to sign it in front of the teller or employee, and you may be required to show a government-issued photo ID.
What you need to Fill out a Money Order
The procedures for filling out a money order differ depending on the institution, whether it’s Western Union or the United States Postal Service. The appearance of each institution’s MO’ may also differ slightly. In general, you’ll need the following information to fill out a MO’:
- Payee’s name (i.e., the person being paid)
- Payee’s address
- Payment amount
- Your name and mailing address
- The purpose of the payment and/or the billing account number
To purchase the money order, you will also need to provide payment. Some issuers also limit your payment options. You will almost certainly be unable to purchase a money order with a credit card.
How To Fill Out a Money Order
#1. Fill in the name of the payee
Fill in the “pay to” or “pay to the order of” field with the name of the money order’s payee. This could be a person’s or a company’s name. Print the name in bold writing.
This form must be completed as soon as the money order is purchased, as this is the only individual permitted to cash or deposit it. If the MO’ is lost or misplaced without a payee’s name written on it, it may be subject to fraud and someone else’s name may be written on it.
Fill out your name in the fields labeled “from,” “purchaser,” or “sender” if you have the option.
#2. Include your address in the purchaser section
Put in your address where the MO’ requests the purchasers. There may be a second address field for entering the payee’s address. If so, you should fill it out as well.
#3. Write the account or order number in the memo field
A memo line allows you to specify what the MO’ is for. For example, the memo could state that it is a purchase for a certain item or a payment toward a debt. If you have an account or order number from the payee, enter it in the memo area as well. Certain money orders may say “payment for” or “account number” instead of the memo.
#4. Sign your name in the purchaser’s signature section
Sign the MO’ on the front where indicated. Purchaser’s signature, Purchaser, From, Signer, or Drawer are all possible labels for this section. Don’t sign the money order back, which is where the payee endorses it.
#5. Save your receipt
Save the receipt because it provides a tracking number that can be used to determine whether the money order was cashed by the correct individual. If the MO’ is lost or stolen, the tracking number will assist you in replacing it. When changing a MO’, a processing fee may apply.
If your plans change, the receipt can assist you to cancel the MO’.
Money Orders: Pros and Cons
There are pros and cons to using a money order. Before you use one, weigh the advantages and disadvantages first.
Pros:
- A money order does not require a bank account to transmit or receive.
- Money orders are very common.
Cons:
- After a money order is cashed (or lost), it might be difficult, if not impossible, to recover your funds, even if it was the result of a scam or fraud.
- If purchased with a credit card, cash advance fees, and interest may apply.
How much will a Money Order Cost?
Each money order carries a small fee, which can be as little as $1 at some businesses and check cashing services. The US Postal Service charges $1.45 for money orders up to $500 and $1.95 for orders between $500.01 and $1,000. At a retail bank, money orders can cost up to $5.
Depending on where you take it, cashing a MO’ may cost you. Check cashing establishments, convenience stores, and retailers frequently charge a fee. Nonetheless, you can deposit a money order into your bank account for free and usually cash it for free at the issuing institution. For example, you can cash a USPS MO’ at any post office for free. If they have enough cash on hand, some rural mail carriers may be able to cash USPS money orders on their routes.
Money Order vs. Cashier’s Check
Money orders and cashier’s checks are accepted by some payees. This is because both of these types of payment are guaranteed, albeit in different ways.
You buy a money order from an issuer that accepts guaranteed payment—the MO’ will not bounce.
The bank initially checks to see if the purchaser has enough money in their account to cover the payment before accepting a cashier’s check. The money is subsequently transferred from the payer’s account to the bank’s account, and a cashier’s check is issued with the payee’s name and payment amount filled in. To access this feature, you must be a banking customer of the issuing bank.
Alternatives to Money Orders
Money orders are commonly used for payment when the payee is not set up for cash receipts. Personal checks, debit cards, credit cards, and even online payment apps may be accepted in some instances.
Money orders, on the other hand, differ slightly from these alternatives. Unlike card or electronic payments, a money order recipient does not require any specific technology to receive a MO’. Also, unlike checks, money orders do not bounce.
How Long does it take to get a Money Order?
Money orders should arrive in a few days in most cases. Unfortunately, this may take longer on weekends or holidays. As a result, wait at least 14 days before expecting any problems with the money order.
What is a Money Order in Scamming?
In the most basic form of money order payment fraud, the thief sends a forged MO’ to acquire products from you. The fraudster will use the forged money order to purchase anything from you on services like Craigslist, Let It Go, or another online shopping site. You deliver the merchandise and deposit the MO’. If it is determined to be fake, you will be left without the item or the money.
How Long Does a Money Order Take to Clear?
If the order is deposited into a bank account, the funds may take a few days to become available.
Conclusion
Money orders are a convenient way to transfer and receive money. These are widely accepted methods of payment, never expire, and can easily be replaced if lost or stolen.
Money orders, unlike checks, will not bounce because they are prepaid, making them a safe way to make purchases, settle debts, or send money over the mail. Just fill out every field of the money order and write legibly to ensure that it is not returned.
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- How to Fill Out a Money Order Correctly: Step by Step Guide
- THIRD-PARTY CHECK CASHING: How and Where To Cash Third-Party Checks
- CASHING OUT 401K: How It Works & What to Consider
- How do Money Orders Work? (+How to Buy with Debit Cards)
- WHERE TO CASH A CHECK WITHOUT A BANK ACCOUNT OR ID
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