Unlike personal checks, money orders are pre-paid in full before being issued. Because of this, the recipient of a legitimate money order can rest assured that it won't bounce when they go to cash it.
Unlike some cashier's checks or certified checks (other popular forms of guaranteed payment), you won't ever need a bank account to send a money order. And if your money order is lost or stolen, you'll usually be able to get your money refunded.
How to fill out a money order
To take advantage of the various benefits mentioned above, you'll need to know how to fill out a money order correctly. Thankfully, the process isn't difficult or complicated.
1. Write your recipient's name
You'll want to fill out each line of your money order with a pen in large and legible letters. As with personal checks , the first line on a money order will be the "Payee" field.
It's important that you fill out your recipient's name accurately here. Your payee will need to provide identification to cash out the money order. And if the name on their ID doesn't exactly match what you provided, they won't be able to get their cash.
If the money order will be used to pay a bill, you'll want to provide your account number as well. Some money orders will have a "Memo" line where you can add this or any other extra details. However, if you don't see a designated spot for additional information, just write your account number in a blank space on the front of the money order.
2. Provide your name and address
Now that you've completed the payee section, it's time to provide your personal information. Depending on where you're purchasing your money order, these lines could have different names, such as "Sender"," "From," "Purchaser," or "Remitter."
Some money orders will want you to provide your name in this section, while others will want you to provide your address. Still others may ask you to provide both pieces of information.
If your money asks for your name, be sure to use your full legal name. And if you're required to provide an address, make sure that the one you provide is your current mailing address.
3. Sign the money order
Next, you'll need to add your signature. With most money orders, the sender's signature line will be on the front at the bottom right-hand side.
You'll also notice a signature line on the back of the money order: This is where your recipient will need to sign when they go to cash your money order, so you'll want to leave that line blank.
4. Pay for the money order
Now that you've filled out all the necessary sender and payee information, you can purchase the money order. You can pay for your money order with cash, a debit card, or a traveler's check.
Some stores may also allow you to use a credit card to purchase your money order. However, you'll want to ask the provider how the transaction will be processed. Some stores will run money order purchases as credit card cash advances , which could cause you to rack up fees and interest charges.
You'll need to pay the cash amount in addition to a transaction fee. Thankfully, these fees are generally reasonable. With the exception of banks, most places that sell money orders will charge less than $2 in fees.
5. Store your receipt in a safe place
Once payment has been made, you'll receive a receipt that is proof of your purchase. You'll want to save this receipt in a secure location for two reasons.
First, your receipt will include tracking information. Using the tracking number on your receipt, you can check to see if, and when, your money order has been cashed. If you feel there was a problem or mistake, contact your money order issuer for help.
Second, you can use your receipt to replace your funds if your money order is lost or stolen. However, you should be aware that most providers will charge an additional service fee when refunding lost or stolen money orders.
Where to buy a money order
One of the most inexpensive places to buy a money order is Walmart . Currently, Walmart charges a maximum fee of 88 cents. And while many stores set a $1,000 limit per money order, Walmart will allow you to send orders exceeding that amount if you provide a government-issued ID.
Finally, many grocery stores and convenience stores that you already frequent each week may sell money orders. Just keep an eye out for Western Union or Moneygram logos at those retailers.
Alternatives to money orders
Money orders are an affordable and secure guaranteed form of payment. However, they won't be the best fit for every situation.
Since money order transfers are often limited to amounts of $1,000 or less, they won't necessarily be a good option for larger purchases, such as purchasing a used car. If you have a bank account, a cashier's check, certified check, or wire transfer may be better options for large transactions. If you're not a bank customer, you may just need to pay with cash.
Also, since a money order can't be used for online transactions, it's not a good replacement for a bank account if you want online bill-pay services. If you're looking for a way to pay your bills online without a bank account, a prepaid debit card could be one of your best choices.
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