When you receive a money order, you need to cash it or deposit it into a bank account. Until you do so, a money order is just a piece of paper. You can cash them at numerous locations, including banks and convenience stores.
Money Order Basics
If this is the first time you've received a money order, you may wonder what you have on your hands. A money order is similar to a check (in appearance as well as function), so you can treat money orders just like checks made out to you.
They're pieces of paper that promise payment from funds in somebody else’s account. To get access to those funds, you have to cash the money order or deposit it into your bank account.
How to Cash a Money Order
The steps below describe how to convert any money order to cash:
1. Bring the payment to a location that cashes checks or money orders.
Money orders are treated very much like checks. Common options include banks, credit unions, grocery stores, and check-cashing stores.
2. Endorse the money order like you would a check.
Sign your name on the back. Wait until you're indoors and ready to hand the money order to a teller or customer service agent before signing it.
3. Show valid identification.
You'll need to verify that you are authorized to cash the money order. A government-issued photo ID, such as a driver’s license, passport, or military ID, is the best option.
4. Pay any fees for the service.
These costs will reduce the total amount of cash you receive.
5. Get your cash.
Place it securely in a pocket, purse, or wallet before leaving the customer service counter.
Where to Cash a Money Order
You can cash money orders at a variety of locations. Your best option is usually a bank or credit union that you already have an account at.
Your bank or credit union likely provides this service for free, like when you cash a check. However, you might not be able to get the full amount of the money order immediately. Your bank’s funds availability policy will explain how much money, if any, you can take immediately, and the rest of the funds should be available within a few business days.
For U.S. Postal Service (USPS) money orders, the entire amount must be available within one business day. For other money orders, the first $200 is often available immediately.
If you're not close to a branch of your financial institution, you may have a better option. If you belong to a credit union, you can likely go to a closer branch of a different credit union that uses the same shared branching network.
Money Order Issuer
If you don’t have a bank account or you can’t get to a branch, try visiting a location of the money order issuer. The issuer is the organization that prints and backs the money order. For example, you might visit a post office to cash U.S. Postal Service money orders or a Western Union office to cash a Western Union money order.
Working directly with the issuer can help you minimize fees and increase your chances of getting 100% of the cash quickly. However, some offices won't cash your money order, even if they sell money orders.
You can also try to cash money orders at retail outlets like check-cashing stores, convenience stores, and grocery stores. In fact, some larger retail stores, especially grocery stores, have Western Union or MoneyGram services available at the customer service desk, so you might be able to cash your money order there for free. If not, a customer service representative can review your options with you.
Depositing Money Orders
If you don’t need 100% of the money order in cash, it's probably a better idea to deposit the money order in your bank account rather than cashing it. You can get cash later if necessary and, in the meantime, your funds will be safe in the bank.
Use your existing checking or savings account and transfer the money elsewhere if you have other uses for it. If you don't have an account at a bank or credit union, you can use this money order for your initial account opening deposit. Having a bank account can potentially save you money and time over the long term.
Logistically, depositing a money order is the same as depositing a check. Endorse the back of the money order and list it separately (as a check) on your deposit slip.
Use caution when using your mobile device to deposit money orders. Banks may require you to deliver the original money order to your bank for processing, and many don’t allow mobile money order deposits at all. Make sure your bank accepts mobile deposits of money orders before you attempt to make one.
Fees for Cashing Money Orders
Expect to pay a fee when you cash a money order anywhere except your bank. You'll typically have to pay several dollars in transaction fees or a percentage of the total proceeds. Those fees can add up, especially at check-cashing stores and convenience stores, which often have higher fees and typically don't make it clear how much they charge.
For example, at most Walmart stores, you can cash a money order issued by MoneyGram for a maximum fee of $4 if the value is $1,000 or less or a maximum fee of $8 if the value is $1,001 to $5,000.
If you receive more than one or two money orders per month, it’s probably worthwhile to open an account at a bank or credit union—even if they charge monthly maintenance fees—instead of using retailers. Once you’re a customer, you can go to your bank and cash money orders or checks anytime you want without additional charges.
Money Order Scams
There are plenty of scams out there involving Invalid money orders. If you want to make sure you’ll be paid, verify that the money order is legitimate before accepting it. You can do that by locating and calling the phone number for the supposed issuer.
Whatever you do, never accept a money order for a greater amount than you have asked for, cash it, and send the excess funds back to your “customer.” This is almost always a scam, and you'll ultimately be responsible for the full amount of the fraudulent money order.
After you verify that a money order is legitimate, do something with it (cash it or deposit it) quickly if you are concerned about fraud. It is possible for the buyer of the money order to cancel it after sending it to you.