Friday, October 14, 2016

How Much A Money Order Costs?

The cost of a money order depends where you get it and the amount you're spending. In most cases, money orders cost about a dollar or less. Scroll down to see a price list from popular issuers.

Where to Purchase Money Orders

Money orders are available to purchase in post offices, banks, convenience stores, grocery stores and check cashing stores. They cost less at convenience stores and post offices where you can usually get one for about a buck.

When you go to a bank or credit union, money orders generally cost more (don’t be surprised if it’s $5 to $10). You’ll have to have an account at the bank or credit union to buy a money order.

Post offices are often a good place to get money orders because they’re considered safe. USPS Money Order pricing works as follows:

$1.25 for $0.01-$500
$1.65 for $500.01-$1,000
International money orders cost more.

Money Order Maximums

Keep in mind that the cost refers to a single money order, and money orders often have a maximum limit. For example, a money order issuer may only offer money orders up to $1000. If you need to pay $2000, you’d have to buy two money orders and pay two fees.

For large purchases, consider a cashier’s check. Banks and credit unions issue cashier’s checks (which are similar to money orders in terms of safety) for larger amounts. They may cost more than a single money order but less than multiple money orders.

More details: Difference Between a Money Order and Cashier’s Check?
Availability and Pricing
Prices for money orders vary from store to store and town to town. You might find that some stores in your area don’t even sell money orders at all, while they sell inexpensive money orders in other regions.

Verify availability and cost before you need your money order.

Call ahead and ask if money orders are available 24/7, or if you need to visit a service desk with limited operating hours. You’ll also need to ask the maximum issue amount.

It might pay to shop around, but if you can find money orders for around a dollar or less, you’re doing well. Note that many convenience stores, grocery stores, and check cashing stores outsource their money orders—thus you’re getting the same money order (at the same price) from numerous locations. MoneyGram and ​Western Union are commonly used at those stores.

Also, check with your bank or credit union. In some cases, those money orders are more expensive, but perhaps more convenient if you're in the branch.

Money Order Locations

Need some ideas on where to shop and what to expect? Below are popular locations for money order purchases.

Additional Services

After purchasing a money order, you might need additional services from the issuer. For example, you can find out if and when the item was cashed (and see who endorsed the back). If the money order gets lost or you decide not to use it, you may need to request a refund or replacement. Those services cost extra. Costs for these services are lowest with the USPS. With other issuers, it's typically around $30 to research or refund a money order.

How And Where Should We Cash The Money Order

When you’ve been paid with a money order, how do you turn it into cash? You can cash money orders or deposit them just like checks. The process goes as follows:

Bring the money order to the place where you’ll cash it (bank, credit union, check-cashing store, etc.)
Endorse the money order by signing your name on the back (learn more about endorsing)
Show identification to verify that you are authorized to cash the money order
Pay any fees for the service
Get cash
Unfortunately, banks often require that you bring in the physical money order – they don’t allow you to use remote deposit with your mobile device.

Money Order Basics

If this is the first time you've received a money order, you may wonder what you have on your hands. A money order is similar to a check (in appearance as well as function), so you can treat money orders exactly like checks made out to you. You can’t spend money orders like cash; they represent funds in somebody else’s account. To use those funds, you have to cash the money order or deposit the funds into your account.

For a more detailed explanation of the benefits and limitations of money orders, see Money Order Basics.

Where to Cash a Money Order

There are numerous places to cash a money order. Your best option is often a bank or credit union that you already have an account at.

Your bank: your bank or credit union probably provides this service for free.

However, you might not be able to get the full amount of the money order immediately – your bank’s funds availability policy will explain how quickly the cash is available. If you belong to a credit union, you might be able to visit the branch of another institution that uses the same shared branching network (so you don’t have to go to your credit union).

Money order issuer: if you don’t have an account or you can’t get to a branch, try visiting a location of the money order issuer (the organization that prints and backs the money order). For example, you’d visit a post office to cash USPS money orders or a Western Union office (often located in supermarkets) to cash a Western Union money order. Working directly with the issuer will help you minimize fees and increase your chances of getting cash quickly. Be aware that some places won't cash money orders if you're not a customer and if they didn't issue that particular money order.

Other options: as a last resort, you can also try to cash a money order at retail outlets like check cashing stores, convenience stores, and grocery stores. For more ideas, see where to cash a check.

Depositing Money Orders

If you don’t need cash right away, a smarter move is probably to deposit the money order (instead of cashing it) in your bank account. You can get cash later if necessary – but why not keep funds safe in the bank until then?

You're less likely to spend the money if you're not carrying it around with you, so deposit what you can and you'll have more for later.

Where should you deposit a money order? Use your existing account -- they'll be happy to take the money. If you don't have an account at a bank or credit union, you can always use this money order for your initial deposit. Having a bank account will save you money and time over the long-term.

Logistically, depositing a money order is the same as depositing a check. Endorse the back of the money order and list it separately (as a check) on your deposit slip.

Fees for Cashing Money Orders

Expect to pay a fee when you cash a money order anywhere except your bank – unless you’re cashing a USPS Money Order at the post office. You'll typically have to pay transaction fees and/or a percentage of the proceeds (several dollars is a typical transaction fee). These fees can add up, especially at check cashing stores and convenience stores. It’s almost always worth opening an account at a bank or credit union – even if they charge maintenance fees – instead. Once you’re a customer, you can go to your bank and cash checks or money orders any time you want without additional charges.

Is it Any Good?

Money orders are often used in scams. If you want to make sure you’ll be paid, verify that the money order is legitimate before accepting it. You can never be 100% sure, but you can identify most scams by calling a money order issuer to verify funds.

Learn more: How Money Order Scams Work
How to: Verify Funds on a Money Order
Whatever you do, never accept a money order for more than you asked for, cash it, and send the excess funds back to your “customer.” This is almost always a scam.

Once you've verified that a money order is legitimate, do something with it (cash it or deposit it) quickly if you are concerned about fraud. It is possible for your buyer to cancel the money order after sending it to you.