What Is a Money Order and How Do You Get One?

When you need a secure alternative to paying with cash or a check, a money order can come in handy. A money order is a form of payment that resembles a personal check and can be purchased at various places, including supermarkets, U.S. post offices and many banks and credit unions.

Money orders are prepaid, which means they can’t be returned for insufficient funds. They are often capped at $1,000 per order plus an issuing fee that varies by provider.

Here’s more about how a money order works and how to fill it out correctly when you need to use one.

What is a money order?

A money order works like a prepaid check. It’s issued as a paper document, and you provide money upfront for it.

Unlike a personal check, a money order can’t bounce and clears almost immediately. It’s fast and risk-free for the recipient, and only the person or business named on the money order can claim it with a valid ID.

You may consider using a money order in certain situations. A money order might make sense if the recipient of the funds doesn’t want to risk a bounced check, for instance.

You might need to make a payment by mail and want to avoid sending a check that contains sensitive banking information — money orders don’t have this. Plus, paying by money order gives you a receipt if you need proof of purchase.

If you don’t have a bank account or access to paper checks, you might use a money order. A money order doesn’t require a bank account.

Just keep in mind that money orders have limits. The U.S. Postal Service, for example, sets a $1,000 limit per domestic money order and $700 limit per international order (limits can vary by country).

How do money orders work? 

You’ll pay the full value of the money order and any fees, which may be based on the dollar amount and the issuer.

Fees are typically between $1 and $5. Be prepared to pay with cash or a debit card, as issuers may not accept a credit card or check.

The recipient can cash or deposit the money order just like a check. Some banks may charge a fee for cashing a money order. However, you may be able to avoid fees by taking the money order to the provider that issued it. 

Where to get a money order

You can find money orders at many places. Here are a few:

• Your bank or credit union
• U.S. Postal Service
• A money-transfer company, such as Western Union or MoneyGram
• A convenience store, such as 7-Eleven
• Walmart
• A grocery store or drugstore
• A check-cashing outlet 

How to fill out a money order

You’ll need to fill out a money order after you’ve chosen an issuer, a payment amount and a payment method. Here is the information to include:

• The recipient’s name and contact information
• Your name and contact information
• A memo to specify what the payment is for or to note account or order numbers
• A signature for the front of the order

Keep your receipt to track when the money order is received or in case you need proof of payment.

If your payment exceeds the issuer’s money order limit, you may want to purchase multiple orders — just remember that fees apply.

How much do money orders cost?

The cost of a money order varies by issuer and transaction size. The Postal Service, for example, charges a fee of $2.10 for money orders up to $500 and $3 for money orders up to $1,000.

Typical bank fees are $1 to $2, but may be as much as $5 per money order. Here’s a look at money order fees charged by several of the largest U.S. banks.

Money order vs. cashier’s check

Money orders and cashier’s checks are both alternatives to using cash or writing checks. The two types of payments, however, have key differences. Understanding them can help you decide when to use a money order or when a cashier’s check might be best.

A cashier’s check is written by a bank or credit union from the institution’s account and guaranteed by the financial institution. The check is signed by someone at the bank. Cashier’s checks are available in all amounts.

You’ll prepay for a cashier’s check as you would for a money order, which means both are guaranteed funds. However, the fee for a cashier’s check tends to be slightly higher. The cost of a cashier’s check varies but could be as much as $10 per check or potentially even higher.

You’ll purchase a cashier’s check directly from a bank, and you’ll need a bank account to do it. That’s different from a money order, which can be bought at a variety of locations — and without a bank account.

Cashier’s checks are generally considered more secure than money orders. A cashier’s check has more security features than a typical money order. 

Cashier’s checks are often used for real estate closings, large purchases and online payments. Money orders, on the other hand, may be preferred for making rent payments, sending funds overseas or buying from someone you don’t know.

Frequently asked questions

What should you do if you lose a money order? 

If you lose a money order, you might be able to replace it if you have the receipt. An investigation is initiated by the provider, and a processing fee might apply for a replacement. The Postal Service, for example, charges $18 to replace lost or stolen money orders.

Where can you cash a money order? 

You can cash a money order in the same places that issue money orders. This includes banks, credit unions, post offices, grocery stores, convenience stores or issuers such as Western Union. The Postal Service doesn’t charge a fee to cash a money order, though other issuers might.

Does a money order expire? 

A money order doesn’t have an expiration date. However, a nonrefundable service charge will apply if you don’t use or cash a money order within one to three years of its purchase date, depending on the state of purchase. The service charge will be deducted from the principal amount according to the terms and conditions on the back of your money order.