A money order is essentially a paper check that you prepay, so it can’t bounce like a check can. Money orders guarantee the payment will go through which can give a payment some much-needed validity.
If someone hasn’t bought a money order before, they may not know how the process works. Keep reading to learn what a money order is and how to fill out a money order, step by step.
What Is a Money Order?
Unlike a check, a money order isn’t linked to the payer’s checking account. Instead, the money order is paid for upfront with cash. The payer must buy the money order and this can be done at select financial institutions or the U.S. Postal Services.
Some people request payments be made by money order because the money order can’t bounce like a check paid from your checking account could. If the money order is real and valid, then the funds are guaranteed because the payment was made at the time of purchase.
Money orders may be viewed as a bit old-fashioned, but they’re still around for a reason — they’re reliable.
Recommended: What Is a Cashier’s Check?
What Is Needed to Fill Out a Money Order?
Not sure what information you’ll need to fill out a money order? Generally, payers should have the following information on hand when they’re ready to buy a money order.
• Payee’s name (must be spelled the same as the name on their ID)
• Payee’s address
• Your name and address
• Memo information (payment reason, account number, etc.) is optional
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.50% APY on your cash!
5 Steps to Filling Out a Money Order
When you’re ready to fill out a money order, you can purchase one at locations such as:
• Banks and credit unions
• Post offices
• Grocery and convenience stores
• Walmart and other mass retailers
• Check-cashing companies
When you buy one (whether paying in cash, with a debit card, or possibly buying a money order with a credit card), you’ll need to provide the payment amount for the money order, and then follow these steps to fill it out:
Step 1. Add the Payer’s Name and Address
Write the name of the individual or business that the payment is going to. It’s vital that the payee’s name is spelled correctly, because when they go to cash a money order (they have a few options for where they can cash their money order), they will have to show their ID to confirm they’re who the money order is for.
Step 2. Write Your Name and Address
The payer then typically needs to write down their name and address in the purchaser section of the money order. Again, this is a step that requires care; write clearly and accurately.
Step 3. Add an Optional Memo
If the payer wishes, they can add additional info in the memo such as what the money is going to be used for or their account number (this is more common when paying bills).
Step 4. Sign the Money Order
To make a money order official, the payer has to sign it.
Step 5. Keep the Receipt
It’s important to hold onto the receipt for a money order until the payer confirms that the payee received and cashed or deposited the money order. This is a crucial step that shouldn’t be skipped. If for some reason the money order is lost, stolen, or involved in a form of fraud, then having the receipt is necessary in order to cancel the money order.
How Long Does It Take for a Money Order to Go Through?
It can take from a few hours to two weeks for a money order to go through. If you make funds available and the payee goes to a pickup location, the process might only take a couple of hours. If a person cashes a money order and transfers it to a bank account, it could take a couple of days. Or it might take longer if mailed and then cashed. (Payment forms such as a wire transfer can be faster, but that requires the payer to have a bank account.) If someone sends a payment via money order and it hasn’t been cashed or deposited within two weeks, then it may be time to cancel the money order.
Typically, money orders only take a few days to arrive via mail, but holidays and weekends can cause delays. The recipient also has to take the steps necessary to deposit or cash the money order. Though they are typically good indefinitely, they could potentially start losing value after an extended period of time due to service charges.
Recommended: How to Transfer Money from One Bank to Another
Importance of Filling Out a Money Order Correctly
It’s vital to fill out a money order correctly, as it’s not possible to change the details on a money order after completing it. It’s especially important to correctly write the name of the recipient since the name on the money order needs to match the name on their ID in order to cash it.
It’s also important to fill out a money order as soon as possible when you buy it. If you purchase a money order and it gets lost or stolen before you fill it out, the person who obtains it could fill it out to themselves and cash it.
How Much Does It Cost to Send a Money Order?
How much it costs to send a money order depends on where the money order is purchased. It usually only costs $1 to $5, and how much it costs can also depend on the value of the money order. For example, if you obtain a money order at a U.S. Post Office at the time of publication, the fee will be $2.35 if the value is up to $500 and $3.40 if the value is between $500.01 and $1,000, the maximum amount available.
Sending a money order internationally can also increase costs.
Recommended: ACH vs Wire Transfers: Which Should You Use?
The Takeaway
Money orders can offer an affordable and convenient way to send someone a guaranteed payment — unlike a check which can bounce. Filling out a money order typically involves writing the payee’s and payer’s name and address, adding a memo if desired, and signing the money order; keeping the receipt is an important step, too.
Money orders aren’t the only way to send payments, though. Your banking partner probably has several other possibilities available to you.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
What can you use a money order for?
Money orders can be used to make a variety of different types of payments. They can come in handy for making purchases when someone can’t write a check because they don’t have a checking account. A good use of a money order can be paying rent, since the landlord knows the payment is guaranteed, but many different vendors accept money orders, and it can be a convenient way to make international payments.
What are some alternatives to money orders?
If someone doesn’t want to buy a money order, they have a few alternative payment options available to them like a cashier’s check, which is guaranteed by the financial institution issuing it. Other options include wire transfers and digital payment services.
How long does it take to fill out a money order?
It generally only takes a few minutes to fill out a money order. To make the process go faster, it’s a good idea to know the exact spelling of the recipient’s name to add to the money order, as well as their address. Having the right amount of cash on hand to purchase the money order can also make the transaction go swiftly.
Photo credit: iStock/Image Source
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOBK1222017