Do Money Orders Go Through Right Away?

Likely, you have asked, how do money orders work? For goods and services purchase or sale, you may opt for using a money order which could be the best option (or the only option) for payment. 

Consumers also prefer it, as it is considered a “safe” way to pay, and therefore it is often opted for as an alternative to checks. 

A money order is a type of instrument that is very much like a check but also has some significant differences. You prepaid it, and it means you pay an amount you want to send. 

Money orders, like checks, serve as payment methods, but they offer certain advantages in terms of safety. Let’s explore what money orders are and how they work.

How Do Money Orders Work?

Here’s how it works:

1.  Purchase: You can pick up a money order at a local place like a bank, post office, or grocery store. You must pay for it personally using cash or any debit card. The price is the actual money order plus any fees. 

2.  Fill out: Some venues may require you to fill out the form with some details like the name of the recipient and the amount, whereas others will request only the amount.  

3.  Delivery: After you get the money order, you have to fill out all necessary parts and then either deliver it in person or send it by mail. Save the receipt, as it’s necessary for the following purposes: tracking, replacement, or cancellation. 

4.  Cash or Deposit: The receiver can get immediate cash by cashing the money order at the issuing location, but the service may charge a fee. They are going to use IDs to verify. 

How Do I Fill Out a Money Order?

The money order is like a check but more user-friendly because the amount is ready-printed. 

Here’s how to do it:

1. Write the recipient’s name in the “Pay to the order of” section.

2. Sign your full legal name at the bottom of the money order.

3. Some money orders require your complete address, so include that if needed.

4. Use the memo line for additional information like your account number for bill payments.

5. Complete all sections on the receipt for your records, especially if you’re getting multiple money orders.

How to Buy a Money Order

A money order can be bought conveniently from several places. 

Just go to any bank, credit union, drug store, grocery, or convenience store, and those offering check cashing or money services such as MoneyGram or Western Union. 

Furthermore, the US Postal Service is another option for you to buy money orders. 

You should have enough funds to cover the amount of the money order, along with its corresponding fees when shopping for one. 

One can pay for the money order with cash and a debit card, which eases the process and makes it available to everyone. 

How Much Do Money Orders Cost?

A small charge accompanies the money orders, but it is often a fraction of the amount of the order. 

Such as, the United States Postal Service charges $2. $4 for money orders up to $500 and $1. Orders over $500 are offered a 00 discount. 01 to $1,000. 

The fees charged might be lower in the case of money orders issued from military postal facilities. 

The price charged by the commercial institutions for the money order may differ, but normally the fees are almost the same. 

It should be kept in mind that international money orders may have higher fees than domestic orders. 

How to Send a Money Order 

Here’s how to send a money order:

1.  The amount of the money order fee is added to the total sum of the money order (or multiple money orders). 

2.  Be sure that you exact the total in cash, on a debit card, or in traveler’s checks. 

3. Make sure you have the full name and mailing address of the person to whom you’re sending or paying with the money order.

4. If you’re sending a money order overseas, make certain the country where the person receiving the money order is located is among the 30 countries accepting American postal money orders.

5. Complete the money order form including your address, as well as the address of the person to whom you’re sending it.

6. Pay for the money order, and mail it in a stamped envelope to the person you want to receive it.

Are Money Orders Safe?

Money orders are considered safer than cash or checks in case of loss or theft. That’s because you can cancel it if it hasn’t been cashed by the person receiving it.

You can reissue it to the recipient if it hasn’t been cashed; and if it has been cashed by someone, not the recipient, you can report them including details of where it was cashed, to law enforcement.

If the money order was stolen and cashed, however, you will not get a refund from the issuer.

If it hasn’t been cashed, and you have the receipt, you can provide the issuer with that information along with paying a cancellation fee and have another money order issued.

Alternatives to Money Orders

Money orders aren’t the only way to pay. Other options offer “guaranteed” funds, and some are even safer than money orders.

1. Cashier’s Checks: Cashier’s checks are like money orders. They’re also paper documents issued to a specific payee and guaranteed by the issuer.

2. Wire Transfers: A wire transfer is an electronic transfer of guaranteed funds. Sellers can be confident if they receive a money order that they’re getting paid.

3. Electronic Payments: Electronic payments of non-guaranteed funds are also an option. If you’re just paying bills, your bank’s online bill payment service can send funds almost anywhere.

4. Checks: Personal checks are often good enough. Billers like utility companies and phone service providers still accept personal checks.

What are the Advantages of Money Orders?

The advantages are: 

2. Privacy protection: Money orders require minimal personal information, such as your name and address, making them ideal for payments when you want to keep your details private.

2. Easy cashing: Money orders can be cashed at local banks or post offices, just like checks, with the payee only needing to provide proof of identification. If purchased from the post office, they can be cashed for free at any post office location.

3. Bank deposit: The payee can also deposit money orders directly into their bank account with no additional fees.

What are the Disadvantages of Money Orders?

The disadvantages are: 

1. Tracking difficulty: Money orders can be hard to track, even with the receipt and tracking number. It may take weeks to confirm if a money order has cleared, and there may be a small fee for tracking services.

2. Cashing fees: Payees may incur transaction fees if they choose to cash a money order for immediate cash instead of depositing it into their bank account.

3. Fraud risk: While legitimate, there’s a risk of receiving fraudulent money orders. Banks will withdraw funds if a money order is found to be fake, similar to a bad check. 

Money orders provide a convenient way for recipients to receive immediate cash payments from banks or other financial institutions. 

This makes them a popular choice for making small to medium-sized payments in situations where cash or personal checks are not suitable.