Want to send money using one of the most secured forms of payment? A money order is your best bet! A money order is a paper payment that can be used to get cash on demand. Unlike a check, a money order cannot bounce. However, it isn’t free. If so, how much does a money order cost?
The cost of money order varies based on the institution. In retail locations like grocery stores, it costs about a dollar. However, a money order costs around $5 in banks.
Are you eager to use a money order? Before you do so, it’s important you understand some things. First, you need to understand what a money order is and how it works. I have highlighted all these below.
How Much Is a Money Order?
Let’s kick start this post by understanding what a money order is:
A money order is a guaranteed form of payment for a specified amount that two parties can use as a form of payment in exchange for a certain product or service. To get a money order, an individual must pay the amount that has been agreed upon for a good service.
The issuer will then produce the official money order document—which can then be provided to the other party (or parties) involved in the transaction. Upon receipt, it can be exchanged for a deposit in the holder’s bank account.
When Should You Use a Money Order?
There are many payment options out there, including wire transfer, check, e-transfer, money orders, etc. While money orders may not be your first payment option, sometimes they are usually the best. You can use money order when:
You need to send secure payment through the mail: When you pay with a money order, you don’t have to bother about someone stealing the payment. Unlike checks, money orders have your personal information printed on them.
A seller requires a money order as payment: Money orders are similar to cash; some sellers want that security.
You don’t have a bank account: Almost one-fourth of Americans are either unbanked or underbanked; money orders are an ideal substitute for checks and debit cards.
You send money overseas: International money orders are a safe and secure option. The U.S.P.S has agreements with multiple countries to accept post office money orders as a form of payment.
You are worried about bouncing a check: Writing an e-check when you know there isn’t adequate money to cover it is a crime in most states. Also, insufficient funds fees can quickly accumulate.
Where Can I Get a Money Order, and How Much Does It Cost?
First, you need to know where you can buy money orders.
Money orders can be purchased from multiple vendors. Supermarkets, convenience stores, and check cashing stores often sell money orders.
The cost of a money order includes the actual amount of the order and a transaction fee. This fee varies depending on where you buy the money order. Here are some examples of what a money order costs at different vendors:
- Regions Banks: $2
- Wells Fargo: $5
- Amscot: $0
- The Check Cashing Store: $0.69
- U.S. Postal Service: $1.45 to $1.95, depending on the amount
Where Can I Cash a Money Order?
Want to cash a money order? Go anywhere you would cash a check! Start with your bank or credit union—especially if you are planning to deposit the funds. Supermarkets, convenience stores, and check cashing locations are other alternatives. Note that some stores will charge a fee for the service.
Money orders are a safe alternative to cash, but that doesn’t mean they don’t come with risks. Here are some ways to protect yourself when paying with a money order.
Completely fill out the money order: A money order is similar to cash. If you don’t fill out the recipient’s name, anyone can cash it.
Keep your receipt: You may need your receipt to monitor the money order or report it lost or stolen.
Don’t cash money orders from strangers: Scammers sometimes send fake money orders to unknowing recipients. Ensure you report those orders to the authorities.
Money Order Alternatives:
Don’t want to buy a money order? Here are other alternatives to consider.
- Personal Checks
Personal checks are a form of payment drawn on a bank account. They are somewhat identical to money orders but also provide some significant advantages like convenience and cost.
Convenience: You can write a check from the comfort of your home
Security: You can stop the payment of a check if it’s lost or stolen
Record-keeping: Personal checks leave a paper trail, so you have evidence of payment
Cost: Many banks don’t charge customers for processing checks.
- Cashier’s Checks
A cashier’s check is like a personal check and money order.
They are issued by banks and drawn to the bank’s account. But, they are more secure than money orders or personal checks. Other advantages of cashier’s checks include:
Access: Cashier’s checks normally clear sooner than personal checks
Security: Cashier’s checks usually have advanced security features like watermarks
- Wire Transfers
Wire transfers send money directly from one online account to another. They are used to initiate real estate transactions and involve fees. Here are some of the advantages of wire transfers:
Speed: The recipient has access to the money sooner than if you pay with a check or money order as it’s moved from one account to the other without issues
Security: A wire transfer is a secure way of sending money—safer than sending cash.