What Is a Money Order? How it Works And When You Should Use One
JUMP TO Section Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.- Introduction to money orders
- Advantages of using money orders
- How to buy a money order
- Filling out a money order
- Receiving money orders
- Fees and limits
- Money order alternatives
- FAQs
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- A money order is like a check you can buy with cash — it's a secure way to send or receive money.
- You can buy a money order from a financial institution, a grocery store, or the post office.
- A money order is more secure than a personal check, and provides a paper trail should a payment ever come into question.
Have you ever seen a commercial that said to "send check or money order"? Maybe you've noticed signs at the customer service desk at your local grocery store or post office and wondered: What is a money order? You've come to the right place. Keep reading to learn about money orders, including how they work and why you may want to use one.
Introduction to money orders
Definition of a money order
A money order is a financial instrument that allows you to move funds. While you probably won't use money orders often, they can be extremely useful in certain situations, particularly if you need to send money to someone who doesn't have a bank account or need to send guaranteed funds.
Money orders are a more secure form of payment than standard checks because they're prepaid. When you go to a place that issues money orders, you'll have to pay for the entire money order amount upfront. Money orders can't bounce when the payee goes to cash it.
How money orders work
In many ways, a money order is like a check you can buy with cash. Once you have the money order, you can use it to purchase or send someone else funds.
You might consider using a money order for a payment where you want extra security, like a bill payment or an important purchase. Money orders often have maximum amount limits, though, so if you want to pay for a big purchase, you should explore additional options, too.
If you get a money order, you can deposit one into a bank account by visiting a branch, using an ATM, or making a mobile check deposit. You can also cash a money order at your bank or post office for free, or at a grocery store or retailer, like Walmart, though there may be fees.
Advantages of using money orders
Security features
Money orders are best for purchases where you don't know the other person well. For example, many landlords require a money order or cashier's check for the first month's rent or after receiving a bad check. Unlike a personal check, the landlord can trust with nearly 100% confidence that the payment is good, as long as it's not fraudulent.
Money orders could also be good for large person-to-person purchases. If you are buying a car on Craigslist or another marketplace, the seller may want payment with cash or money order to ensure they actually get paid.
A money order can also give you a little more privacy than when you write a personal check, as it doesn't contain your full address or other personal information. They are safer to mail than cash, which also makes them popular for remote purchases that don't take place online.
Access for those without bank accounts
You don't need a bank account to get or cash out a money order. Money orders can be purchased and cashed out at the local post office or grocery store. A money order allows people without bank accounts to have access to a more protected form of payment.
How and where to purchase to buy a money order
You can buy a money order at your local post office, Walmart, or other grocery stores.
Money orders are issued through partnerships with major providers like Western Union and MoneyGram. When buying a money order, plan to pay with cash or sometimes debit, including a fee that is typically around $1 to $5 per money order.
Filling out a money order
After your money order is printed, you can fill out a money order. Write the payee information and sign it, just like a check from your own personal checkbook. The recipient will then endorse the back and deposit it like a check in their bank account, or cash it.
Because the money order is prepaid and coming from a trusted entity like Western Union or MoneyGram, there is virtually no chance it will bounce like a regular check. That is why a money order is often considered a more secure payment method than a check. Money orders also leave a paper trail that can act as proof of payment or proof of funds in the event of a future dispute.
Be sure to keep your receipt when buying a money order. If your money order is lost, you can generally get it replaced if it hasn't been cashed or deposited.
Receiving money orders
If you have a money order and don't know what to do with it, you have a few options to get cash or add it to your bank account.
The easiest option for most people is to make a mobile check deposit. Just like any other check, you can snap a picture to deposit it into your checking, savings, or another account. If you're not into mobile banking, you can also deposit it at an ATM or with a teller.
If you want to get cash for a money order, the best option is to take it to the issuer. Your bank may also be willing to cash a money order. Beware check-cashing services, as they charge extra to give you cash for your money.
Fees and limits
Comparison of money order fees by location
Here are some places you can generally get one and how much it may cost:
| Places to buy a money order | Price to buy a money order |
| Walmart | maximum fee of $1 |
| USPS | $2.10 for money orders under $500; $3 for money orders of $500.01 to $1,000; $0.70 for postal military money orders |
| Grocery store | $1 to $3 |
| Bank | $0 to $5 depending on your checking account |
| Credit Union | $0 to $5 |
Maximum amount limits
Many money orders have a limit of $1,000. You could get several money orders if you need to move more than that.
However, you could also get a cashier's check instead. The difference between money orders and cashier's checks is that the latter doesn't have typically have maximum amount limits.
Alternatives to money orders
Money orders were a popular way to pay for many years, but competing online products and other money order alternatives make them less common these days. Here are some alternatives to money orders to consider:
- Cash: While you might use plastic most of the time, good old cash is still a trusted payment method for many purchases.
- Online payment: Online payments using services like Venmo, Cash App, PayPal, Zelle, Google Pay, Apple Pay, and even Facebook Messenger offer options to connect to a bank account and send money to someone else using your phone or computer.
- Personal check: Personal checks don't offer privacy for the buyer or guaranteed funds for the seller, but they are usually free to use with the best checking accounts.
- Cashier's check: A cashier's check is even more secure than a money order and can be purchased with higher limits. However, there's usually a higher cost and you can generally only get them from a bank or credit union.
Money order FAQs
What is the maximum amount for a money order? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Many money orders have a maximum amount limit of $1,000. The maximum amount for a money order can vary depending on the place where you get it, though.
Can a money order be canceled or refunded? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Yes, money order may be refunded as long as it hasn't been cashed by the payee. You can request a refund by contacting the issuer and filling out a form. Keep in mind there may be fees involved, depending on where you got the money order. Also, it's helpful to have your money order receipt.
How long does a money order take to clear? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Money orders clear quickly because they are a prepaid form of payment. If you're depositing the money into a bank account, processing could take a few business days.
Is a money order safe to send by mail? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.In regards to safety tips for sending money orders by mail, make sure you know your recipient. Speak to them directly or verify their identity if you can. Also, double-check the address to make sure your money order is being sent to the right place.
What should I do if I lose a money order? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.If you lose a money order, you can try canceling your money order and asking for a refund. You'll need to provide a receipt as proof of purchase.
Can money orders be purchased with a debit card? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Yes, most places allow you to use a debit card to purchase a money order. For example, the post office and Walmart let you use a debit card but not a credit card.
Do money orders cost money? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Money orders usually will require a fee between $1 and $5 at most places. However, depending on which type of checking account you have, you might be able to waive common bank fees for money orders at a bank or credit union.
Eric Rosenberg Freelance Writer Eric Rosenberg is a finance, travel, and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full-time. He has in-depth experience writing about banking, credit cards, investing, and other financial topics, and is an avid travel hacker. When away from the keyboard, Eric enjoys exploring the world, flying small airplanes, discovering new craft beers, and spending time with his wife and little girls. You can connect with him at Personal Profitability or EricRosenberg.com. Read more Read less 
Sophia Acevedo Banking Editor Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics.ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, and budgeting and saving. She is highly knowledgeable about long-term trends in rates and offers at banks across the U.S.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circumstances and overcoming their fears around money.ExpertiseSophia's expertise includes:- Bank accounts
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