What are money orders, and how do they work?

By: Daniel Holcomb

DISCLOSURE: This post may contain affiliate links, meaning this site may receive a commission if you decide to make a purchase through my links, at absolutely no cost to you. This please read my affiliate disclosure page for more information. Also, please read our article disclaimer

A money order is similiar to a check, but at the same time, it’s very different. If you have any questions about what are money orders and how they work, then you are in the right place. I will try to answer all of this for you or at least, attempt to answer it. This is one of our most popular pages, so you are in good company, that is, people who want to learn!

What Is A Money Order

A money order is a type of payment that is similar to a check, but is considered to be more secure. It is a form of guaranteed funds, which means that the issuer, typically a bank or post office, guarantees that the funds will be available to the recipient.

What Are Money Orders Used For

A money order can be used to pay bills, make purchases, or even to send money to friends and family. To obtain a money order, you will need to visit a location that offers them, such as a post office, bank, or retail store. You will need to provide the issuer with the necessary funds, as well as the recipient’s name and address.

4 Major Benefits Using A Money Order

When you purchase a money order, you will be given a document that includes a unique serial number, the amount of the order, the name of the recipient, and your own signature. The recipient can then take the money order to a location that accepts them, such as a bank or retail store, and cash it or deposit it into their account.

One of the main benefits of using a money order is that they are considered to be a more secure form of payment than personal checks. This is because money orders are prepaid, which means that the funds are guaranteed by the issuer, and the recipient can be confident that the funds will be available when they cash or deposit the money order.

Another benefit of using a money order is that they are often available to people who may not have a checking or savings account. This can be especially helpful for those who are unbanked or underbanked, as they may not have access to traditional banking services.

Additionally, money orders are also useful for people who want to send money to others, but do not want to risk the money getting lost or stolen in the mail. Since money orders are prepaid and include a unique serial number, they can be tracked and replaced if they are lost or stolen.

Another benefit of money orders is that they are a great way to send money to people who may not have access to a bank account. This could be someone who lives in a remote area, or someone who has been recently displaced and is in need of emergency funds. Money orders can be cashed at many retail locations, making them a convenient option for those who may not have access to traditional banking services.

Cost To Get A Money Order

When it comes to cost, money orders are generally very affordable. The cost will depend on the issuer and the amount of the order, but they are often less expensive than other forms of guaranteed funds, such as cashier’s checks.

Basic Steps To Get A Money Order

Find a place that sells money orders. This can include banks, post offices, supermarkets, and check cashing stores.
Fill out the money order form with the recipient’s name and address, as well as your own name and address.
Pay for the money order with cash or a debit card. The cost of the money order will depend on the amount you want to send and the location where you are buying it.
Keep the receipt that you are given, as it will include information about the money order, such as the serial number, which will be needed if the money order is lost or stolen.
Send the money order to the recipient. This can be done by mailing it or giving it to the recipient in person.

Some additional things to keep in mind:

Some money order providers might need a ID proof from you.
Some places might charge a small fee for buying a money order.
Make sure to double check the details before submitting the money order, as mistakes can be difficult to correct later on.

The Conclusion

In conclusion, a money order is a secure and affordable way to make payments or send money to others. It is a guaranteed form of payment, and can be a useful option for those without access to traditional banking services or for those who want to send money through the mail. If you need to pay a bill, make a purchase, or send money to someone, a money order is definitely worth considering.