What is a Money Order and How Do They Work?

counting money

Money orders are a great way to make purchases and pay bills regardless of whether you have a checking account or not.

Explore this Guide:

 

Some people do not understand how useful this financial tool can be.

 

They are an extremely useful money management tool that can help people send and receive money safely and successfully.

 

Additionally, if you don’t have a checking account, an order can be the most secure way to send money to someone else.

 

What is a Money Order?

 

They are similar to checks. They are a paper document that can be used as a form of payment. The main difference is that money orders are paid for in advance while checks are not.

 

Checks are a paper document allowing the recipient to take money from your account. Money orders are a paper document saying that money has already been taken out by the money order provider and is ready to be received right away.

 

Go to Get Western Union Money Orders from Check City.

 

Money Order vs Checks

 

Though they are very similar, there are some key differences between money orders and checks.

 

Money Orders Are More Immediate Than Checks

 

Money orders are paid for in advance while checks are paid for on a later date when the check receiver finally gets around to cashing the check.

 

But money orders are paid for in full the moment someone purchases them.

 

Since money orders are prepaid, those funds leave your account the moment you purchase the money order.

 

But checks are not prepaid.

 

When you use a check, the check funds aren’t taken out of your account until the check receiver manually deposits or cashes the check.

 

Money Orders Are More Secure Than Checks

 

Money orders are often a preferred form of payment because they are more secure.

 

Part of what makes them so secure is that they are a prepaid form of payment.

 

Since they are prepaid, the receiver will have their funds right away and the sender won’t have to wait for those funds to get pulled from their account.

 

It’s also very difficult for the wrong person to cash a money order. When you take out a money order you outline who should receive the money so only the correct recipient can cash that money order.

 

How Do Money Orders Work?

How-to-Fill-out-a-Money-Order

 

Many people are already familiar with checks and how checks work. But are you familiar with how to use a money order?

 

If not, have no fear.

 

The process is incredibly simple and will leave you with a more secure and more immediate payment option in the future.

 

Find a Money Order Location

 

First, you have to find a location that offers this financial product.

 

You can find this financial service at financial institutions and at some grocery stores and supermarkets.

 

Check City is an agent location with Western Union and offers Western Union money orders.

 

Find a Check City Store Near You to purchase a money order today!

 

Be Prepared

 

Don’t forget to bring what you need to send and receive money through a Western Union agent location.

 

Whether you’re purchasing a money order or receiving one, there are a few things you’ll want to have with you and some information you’ll need to have handy.

 

A form of payment. You can use cash or a debit card.

 

The name of the person or organization receiving the money.

 

The amount of money you want to send.

 

Valid government-issued identification may be required.

 

Fill Out the Money Order

 

Filling out an order is very similar to filling out a regular paper check.

 

There are only 5 sections you’ll need to fill out.

  1. The “pay to the order of line.” This line is for the person or company you are sending the money order to.
  2. The “payment for” or “account number” line. This line is optional. Some people use money orders to pay bills. On this line, you can put your account number to make sure whatever bill you have gets paid to the correct account.
  3. The “purchaser’s address” line. This line is for your contact information.
  4. The “purchaser’s signature.” This line is for your signature.
  5. The dollar box. This section is for you to write down the amount of money you want to put on the order.

 

For more details on filling out orders, go to How To Fill Out A Money Order.

 

Track Your Order

 

When you purchase an order you’ll get a receipt. Make sure to keep the receipt in a safe place.

 

This receipt has all the basic information about the order, including a tracking number.

 

Go to Track Your Money Transfer at WesternUnion.com and type in your tracking number or MTCN.

 

track-a-money-transfer-screenshot

 

After you click continue you can track your order to make sure it gets where it needs to go safely.

 

If you send an order in the mail, you should request a mail tracking number so you can keep tabs on the envelope.

 

How Much Does a Money Order Cost?

 

Just like many financial services, money orders come with some rates and fees.

 

If you send the money by mail, then you might also have to pay for postage, extra tracking precautions, mail security, and any other mailing services.

 

The cost of a money order will vary slightly depending on where you go to get the money order.

 

Some places also have maximum or minimum limits on the funds you can put on one order.

 

You can always call a financial institution first, or visit their website, to find out their rates and fees before you use them.

 

What Are Money Orders Used For?

 

There are many instances where this financial service can be useful.

 

Being able to both send and receive secure payments is really important. Especially when those payments are important like rent and utility bills.

 

Send a Secure Payment

 

If you really need to make sure a payment goes through, send the funds through a money order.

 

You’ll be able to make the payment immediately and you’ll ensure the payment receiver has those funds right away.

 

Receive a Secure Payment

 

If you are expecting a payment and want to make it extra secure, ask the payee to send you a money order. That way you’ll receive the payment the moment you get the money order.

 

Don’t Have a Checking Account

 

Not having a checking account makes transferring money more difficult. If someone doesn’t have any online bank accounts, then they can’t send funds electronically.

 

Every year the Federal Deposit Insurance Corporation (FDIC) comes out with new survey reports about the finances of US households. In 2019, they found that around 7.1 million US households didn’t have bank accounts.

 

All of these people still need a safe way to send and receive money. Money orders are one of the primary ways unbanked people can send and receive money securely.

 

Avoid Carrying Cash

 

If someone doesn’t have a bank account then they also don’t have checks or debit cards. This makes it difficult to make large purchases without carrying large amounts of cash.

 

Carrying a lot of cash on you can be dangerous and insecure. If you get robbed or lose that cash there is little that can be done to get that money back.

 

Money orders are protected from theft because only the intended recipient can cash or deposit them. If you lose a money order you can contact Western Union and cancel it.

 

So if you need to make a big purchase, but you don’t want to carry lots of cash with you, get a money order instead.

 

Money orders are accepted by almost any business. You can also use money orders at the bank or any government agency.

 

Send Money Safely Through the Mail

 

Many people purchase money orders when they need to send money through the mail.

 

Sending cash through the mail isn’t the safest way to send money to someone. If someone sees that an envelope contains cash, there’s a higher risk of it getting stolen.

 

But money orders are just a regular piece of paper that can safely go unnoticed and are harder for thieves to successfully cash.

 

Avoid Bounced Checks and Overdraft Fees

 

One of the biggest downsides to using checks is that the payments don’t fall right away.

 

Instead, you have to wait on another person or organization to get around to processing the check for those funds to come out of your account.

 

When you live on a tight budget, this wait can really upset your financial plans for the month.

 

By using a money order instead of a check, you can avoid bounced checks and overdrafts on your account because the money will get taken out of your account immediately instead of later.

 

Where Can I Get A Money Order

money order store building at check city

 

The most common place to get a money order is at a financial institution, like a bank or credit union, or at some major stores like Walmart.

 

Any Western Union location or Western Union Agent location will have the ability to send and receive money orders.

 

Check City is an agent location with Western Union. Click on your state below and get connected with your local Check City store. Our representatives are friendly and ready to help our customers get the financial services they need.

 

In Conclusion,

 

Money orders are a key financial tool for many people. If you haven’t already used a money order, you might be missing out on some great benefits.


Sources


FDIC.gov. “How America Banks: Household Use of Banking and Financial Services.

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