What Is a Money Order?

Introduction

Not everyone has a checking account, and some businesses do not accept personal checks. A money order offers a safe way to send payments without using cash.

What Is a Money Order?

A money order is a prepaid payment document. You pay the full amount upfront plus a small fee, and the money order can then be given to the person or business you are paying. Because it is prepaid, the recipient knows it will not bounce.

Where to Get One

Money orders are sold at post offices, many grocery stores, convenience stores, and some banks. Fees are usually low, often just a few dollars. U.S. Postal Service money orders can be purchased for amounts up to $1,000.

Using Them Safely

Fill out the recipient's name immediately after buying a money order so no one else can cash it. Keep your receipt, which allows you to track or replace the money order if it is lost. Be careful of scams involving fake money orders, especially when someone asks you to send back extra money.

Conclusion

Money orders are a simple and secure way to make payments. Knowing how they work gives you one more tool for managing your money!