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What Is a Money Order?

Key Takeaways

  • A money order allows you to securely send up to $1,000 in exchange for a small fee.
  • Money orders can be purchased at a bank, credit union, the U.S. Post Office, or some supermarket and convenient store locations.
  • To purchase and issue a money order, you’ll need the receiving person’s or business’ name, your address, any applicable account number, and your signature.

A money order is a secure way to send money or make a payment — up to $1,000. Many recipients prefer money orders because, unlike a personal check, a money order can’t “bounce” and clears almost immediately; therefore, they provide a fast, risk-free form of payment.

Money orders are secure because they’re issued by third-party distributors, in direct exchange for the cash value of the money order, plus a small fee — usually less than $15. And money orders can only be claimed by the person or business they’re addressed to.

Money orders can also be sent internationally and can be used to settle debts larger than $1,000 (by sending multiple money orders). In some instances, you don’t need a bank account to send one.

How do you fill out a money order?

There are a number of places that distribute money orders. Banks and credit unions are the obvious destinations, but there’s also the U.S. Post Office, as well as some supermarkets and convenience stores.

Once you arrive at the money order distributor, you’ll need to provide the following information to process a money order:

  1. The receiving party's name (person or business)
  2. Your address
  3. Any applicable account number (if the money order is tied to a bill)
  4. Your signature

Make sure you hold onto your money order receipt in the off chance there are any issues and you need to cancel it. The recipient can cash the money order by simply signing the back of it.

Is a money order right for you?

Money orders aren’t the only way to send large sums of money. But depending on your needs, it could be the right choice.

Here’s how they compare to other payment methods:

  • Personal check: Personal checks are not guaranteed (if there’s not enough money in the sender’s account, then the check will bounce), so most business recipients prefer more secure payment methods — especially for larger sums of money. Personal checks, however, don’t charge a processing fee or require a trip to a distributor; therefore, they’re quick and cheap on the sender’s end.
  • Cashier’s check: This is also a secure payment method, but they could be more expensive (around $10) than a money order. However, cashier’s checks have much higher maximums. So if you need to send $8,000 for a car purchase, it might be cheaper to send one cashier’s check rather than eight money orders.
  • Wire transfer: Domestic wire transfers (about $25) are also more expensive than money orders, but they let you send more than $10,000 in quick fashion (international wire transfers are closer to $40). On the flip side, recipients also pay a receiving fee.  
  • Zelle: Zelle® is a free service offered by financial institutions across the country that lets you send and receive money, typically in a matter of minutes. Transaction limits vary depending on your bank, so check yours before deciding to use Zelle. Generally speaking, Zelle is faster and more affordable than a money order.

What to remember

As you can see, the proper payment method depends on how much you’re sending. For instance, if you want to securely send $1,000 or less, Zelle is the most cost-efficient method. But if your bank does not offer Zelle, a money order could be your next-best option. If you’re sending more than $1,000, Zelle might still be the most affordable option. But if your transaction exceeds your bank's daily limit, check out these other payment methods.

More information

Need to purchase a money order? Stop by your nearest Citizens Bank branch to learn more.

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