Money orders are an excellent option for paying bills or sending money to other individuals without the issues that can arise by using a personal check. Understanding the details of this product can open up a new facet of banking for you and help you better manage your financial life.
What Is A Money Order?
It is perhaps best understood as a check issued from the bank itself, rather than directly from your personal account.
Similar to a certified check, a money order is a document purchased with a specific dollar value. You can then fill out the recipient’s information and mail it to them. The recipient then deposits the money order, as they would a check, and the funds are released to them according to their bank’s funds availability policy.
Why Would Someone Use a Money Order Instead of a Personal Check?
There are several reasons why money orders are preferred over other methods of payment by businesses and private citizens alike.
A personal check can be canceled or disputed by the issuer, or it can bounce. For these reasons, many merchants will accept a money order but not a personal check.
Personal checks have your private account number along the bottom. Some people do not feel comfortable divulging their account number to anyone else, and may prefer to use a money order to protect their information.
A money order takes no time to clear your bank account, because it is paid for with cash. The money is removed from your checking account and will immediately be deducted from your available balance. Those who lead busy lives may appreciate this aspect, as it makes unintentional overdrafts far less likely.
Those who prefer to pay their bills in cash often appreciate that a money order is far less expensive than the fees some companies charge to pay in person or use another method of payment.
Where Can I Get a Money Order?
You can buy a money order at banks, credit unions, convenience stores, bodegas and grocery stores. However, not all are created equally. Some money orders sold by businesses that are not financial institutions may have security issues, such as lacking watermarks, lacking security strips or being easy to erase and alter. For the safest money order, purchase one from a financial institution. Banks and credit unions are on the forefront of security and work towards staying one step ahead of forgeries, theft and other nefarious document alterations.
A money order is a great tool to help you pay your bills or send money to loved ones without any concerns of over-drafting your checking account or exposing your personal account numbers. If you have any additional questions about this financial product, one of our financial services officers would be happy to assist you further.