How to Fill Out a Money Order

How to Fill Out a Money Order article image.

A money order is similar to a personal check, but provides a more secure way to make a payment. Unlike a check, however, the funds aren't drawn when a money order is deposited by the recipient. Funds are pulled from your bank account when the money order is purchased, which means the funds are guaranteed regardless of your account balance when it's deposited.

Money orders can be a good way to make payments if you don't have a bank account or are afraid of bouncing a check.

Filling out a money order is relatively straightforward, but it's still important to know how to do it right because you can't alter a completed money order.

Steps to Filling Out a Money Order

To start, you'll need to know where to purchase a money order. You can get money orders from a variety of places, including your bank or credit union, grocery and convenience stores, post offices and even check-cashing companies.

When buying a money order, you'll need to provide payment upfront, typically in the form of cash, a debit card or your bank account if you're going through your financial institution. In some cases, you may be able to buy one with a credit card, but it's not recommended because your credit card issuer may classify it as a potentially costly cash advance. Depending on where you go, you may be assessed a fee, which can be anywhere from under $1 up to $5. Here are the steps to buying a money order:

  1. Write the name of the person or business you're paying. Make sure to use the right name and spell it correctly because it will likely be checked against the recipient's ID when they try to cash it.
  2. Write your address in the purchaser section (not the recipient's address).
  3. Include information in the memo line, such as what the money is being used for or your account number if you're paying a bill. This step is optional.
  4. Sign the money order on the signature line to make it official.
  5. Keep the receipt you receive from the merchant until you can confirm the money order has been received and either cashed or deposited. This step is crucial because it allows you to cancel the money order if necessary or retrieve it if it goes missing. If the recipient says they never got the money order, the receipt will act as proof that you sent it.

If you're concerned about getting any of these steps wrong, ask the person processing your money order for assistance.

How to Cash a Money Order

Similar to a personal check, a money order can be cashed at most banks and credit unions, though you might have to pay a fee if you're not a member. You can also cash a money order at the company that issued it, such as Western Union or a grocery store.

Because a money order is valid only for the specified recipient, you'll need to present a current form of ID to cash it. That means a driver's license, passport, state ID or military ID that matches the name on the money order. If the name doesn't match, you'll need the person who paid for the money order to cancel it and re-order it.

Pros and Cons of Money Orders

A money order is just one of many different ways to pay, but there are some benefits to using one over other options, including:

  • They're safe and secure to mail.
  • Legitimate ones won't bounce like a personal check.
  • You don't need a bank account to buy one.
  • You can send them domestically and internationally.
  • Funds will be available immediately.

That said, there are some potential issues that may cause you to opt for an alternative payment method. Drawbacks include:

  • The payment you can make typically maxes out at $1,000.
  • In most cases, you need to purchase one in person.
  • They can be easily falsified or altered.
  • Fees vary depending on where you buy one.

One popular alternative to a money order is a cashier's check. These are only available from your bank or credit union, which means you need an account, but they allow for larger transactions. You'll typically pay a fee for this payment type too. Another option is to set up a wire transfer. This can be especially beneficial if you're sending money abroad, and it may be required in some financial transactions, such as closing on a home.

If you'd prefer, peer-to-peer payment methods are gaining adoption by both individuals and businesses. An app like Zelle, Cash App or Venmo might be the most convenient way to make a payment (even a large one) as long as you and your recipient are comfortable using it.

How to Protect Yourself From Money Order Scams

Just like most other forms of payment, money orders are subject to scams. Money order scams come in many forms. For example, someone may send you a bogus money order as payment for an item. You receive the money order and deposit it, then ship the item, only to have your bank claw back the money when they realize the payment method was fraudulent.

Or the scammer may send you a fake money order to pay for an item, then ask you to send some or all of the money back because they're experiencing a financial emergency.

On the other end of things, you may want to buy something online from a vendor that only accepts money orders. In this case, you may send the money order and never receive the item. By the time you realize what's happened, the money is long gone. You can cancel a money order and get a refund in some instances, but don't bank on that—especially if the money order has been cashed.

Before sending out a money order, verify that you're giving the money to a reputable vendor of goods and services. If a business only accepts money orders, that's a good cue to vet them a little more thoroughly before buying.

When you're the one receiving a money order, call the issuer to ensure the money order is valid before attempting to cash or deposit it. If you deposit a money order you aren't sure is real, don't spend the money right away. It can take a bank several days or longer to determine whether a money order is fake, and if you've already spent the money, you could be charged overdraft fees if the amount hasn't yet been deposited into your account.

Finally, if someone sends you a money order and then asks for some or all of the money back, that may be a clear sign that it's fraudulent. Don't send them any money, and work with your bank until the issue is resolved.

Be Diligent When Sending Money to Anyone

In most cases, you can make payments using credit cards, debit cards and cash, which all provide relatively safe transactions. If you fall victim to credit card fraud, for instance, most card issuers offer zero-liability fraud protection.

With money orders, it's important to be smart about when to use them. In most cases, it's best only if you know the recipient, whether it's a person or a company. As with any form of payment, make sure you trust the recipient of your payment. If you feel skeptical, do more research or avoid making the payment altogether.