Money Order

Updated on January 5, 2024
Article byPrakhar Gajendrakar
Edited byRaisa Ali
Reviewed byDheeraj Vaidya, CFA, FRM

What Is A Money Order?

Money orders are certificates representing payment orders. The sender purchases it for a specific amount, and the beneficiary can receive cash on demand. Post offices, banking institutions, government bodies, and retailers provide money order services.

Money Order

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The 18th century saw the development of the system in Great Britain, and the 19th century saw its rise to prominence. It was originally distributed by the United States Postal Service in 1864 in major cities and towns in the United States. The largest non-bank issuer of it is the American Express Co., which started issuing them in 1882.

Key Takeaways

  • A money order is a payment order certificate purchased by an entity to make a payment to another entity. The amount to be paid and payee details are present in it.
  • The payor or sender can purchase it using cash from post offices or other financial institutions and mails it or hand it over in person to the receiver. The payee can cash it at his preference.
  • Filling out the order form requires details like the name and address of the payee, payment amount, payer’s name and address, date of purchase, reason for payment, and signature of the payor. 

Money Order Explained

Money orders are certificates an entity purchases to give to another. It is a payment method from the sender to the receiver where the sender purchases the order to pay a definite sum to the receiver or payee using cash equivalent to the sum of the order amount and fees and sends the order in paper payment to the payee. The payee can cash it at his discretion. Its purchase and remittance typically take place at different nodes. The sender can mail or hand it over to the payee in person.

The money order fill out form includes the name and address of the payee, payment amount, payer’s name and address, date of purchase, the reason for payment, and signature of the payor. Then, the sender prepays the money corresponding to the order using cash, debit card, or even credit card to the issuer and the issuer’s fee.

However, using cash instead of credit card payment mode is better to avoid extra charges. Furthermore, if it is purchased from a bank where the sender has a checking or savings account, the sender can make the payment from the account. So it’s an example of a paper payment that can’t be returned for insufficient funds, unlike a bounced check.

It fulfills a fundamental necessity that other new forms of payment cannot effectively fulfill. That is, it cannot be duplicated even if they are no longer a prevalent method of payment hence making it a secure form of payment.


Asher lives in New York. She has a steady job and a good income. However, Asher lives alone, and her mother lives in a small town in Atlanta. As a result, she cannot visit her mother frequently. So every month, Asher sends his mother a money order of $900.

Her mother receives the money order in Atlanta. She is old and rarely goes out, so she cashes it at the nearby Walmart MoneyCenter.

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Cashier’s Check vs Money Order

Cashier’s CheckMoney Order
A bank issues a cashier’s check.Customers can purchase a money order at post offices, retail stores, banks, etc.
Banks issue it only to their customers; it implies that the people must have a bank account to access the cashier’s check.A checking account is not necessary to access it.
Bank takes the amount corresponding to the check from the customer’s bank account.Payment to purchase it is done using cash.
The fee usually ranges from $10 to $15.According to USPS data, the amount up to $500 cost $1.45, while those between $500.01 and $1,000 cost $1.95.
It is more secure.Considered less secure compared to a cashier’s check.
There is no upper limit.The maximum order in a single order is $1,000.

Frequently Asked Questions (FAQs)

How to fill out a money order?

Filling out requires important information, primarily the payee and payment details. The main contents are the name and address of the payee, payment amount, payer’s name and address, date of purchase, the reason for payment, and signature of the payor. Purchasing it often comes with a receipt containing the serial number. The receipt is useful whenever the sender wants to check the order’s status.

Where to get a money order service?

The main providers are the post offices. For example, in America, The United States Postal Service (USPS) provides affordable and zero expiration paper payment services. The issuers besides post offices include banking institutions, government bodies, credit unions, retailers, etc.

Do money orders expire?

Typically, they do not expire but, if not endorsed within a set time, can become old and fall into the abandoned property regulations category. To check the status, the issuer can connect with customer service and track money order. If it hasn’t been cashed, it can be canceled. The process to cancel the order is to contact the issuer, provide details, and pay a fee with a receipt copy.

This has been a guide to What is Money Order and its meaning. We explain its services, how to fill out and track it, differences from the cashier’s check, & an example. You can learn more from the following articles –