How to Use a Money Order

Make Payments Using Money Orders

Instructions for using a money order: where to buy, filling it out, final payment
••• Justin Pritchard

Money orders are a form of payment similar to checks. Instead of paying with cash (or newer options like a credit card, app, or bank transfer), you get a small paper document that allows you to exchange funds. Using a money order is easy enough once you’ve done it a few times.

Money orders are safer than cash when making payments by mail: they can be tracked and canceled, and they’re “made out” to a particular recipient – not just anybody can cash a money order.

Sellers (or whoever you’re paying) may also prefer money orders because – when they’re not fakes – they’re almost a form of “guaranteed” payment.

For more background information, see How Money Orders Work.

How to Use a Money Order

If you’re familiar with writing a check, filling out a money order is very similar – you just need to get the money order first. If this is all new to you, we’ll break it down step by step.

1. Buy the Money Order

Payment: the first step is to buy a money order for the amount you need. For example, if you need to pay somebody $100, you’ll need to get a money order for $100. Money orders can generally only be bought with cash or a debit card, so be prepared to pay at least that much.

Where to purchase: you have several options, and convenience and cost will probably dictate where you buy. Banks and credit unions often charge five to ten dollars, but other vendors usually charge around one dollar.

Places to buy include:

  • Convenience stores
  • Grocery stores (the Customer Service desk)
  • US Post Offices
  • Pharmacies
  • Check cashing and money transfer stores
  • Banks and credit unions

Fees: most places charge around one dollar for money orders up to $1,000 or so. Money orders have maximum limits (typically $1,000), so you’ll need to buy multiple money orders if you’re paying more than $1,000.

For large purchases, an alternative like a cashier’s check might be better.

Keep your receipt: hold on to any confirmation materials you get with your money order. If the money order goes missing, you can track it to find out if it’s been cashed or deposited. If it never turns up, it’s easier to cancel and get another one reissued if you have your receipt handy.

2. Fill it Out

The amount of your money order will be printed on the document when you buy. However, you’ll need to provide additional information and sign the money order when you’re finished.

Payee information: write the name of the person or business you’re paying in the area that says “Pay to the order of” or something similar. Ask the recipient if you’re not sure what name to write here.

Addresses: some money orders ask for the address of the recipient (and they might ask for your address as well). This information helps ensure that the money order gets to the recipient, and it makes tracking easier. However, this is not the most important part of a money order, and your recipient might not care if you use actual addresses.

Memo: money orders typically provide an area labeled “Memo” or “Re:” for additional details about your payment (such as your account number or order confirmation).

If you can’t find that area, you can write anything needed on any blank section of the front of the money order. A sticky note on the money order might also do the trick.

Signature: your signature is required at the bottom of the money order. Simply sign your name on the front (not the back) of the document. This area might be labeled "Signature," "Purchaser," or "Drawer.”

 For more details, see How to Fill Out a Money Order.

3. Make your Payment

Once your money order is filled out, it’s time to pay. Money orders can be mailed safely – just be sure you’ve kept a copy of your receipt. Money orders are also used for in-person payments.

Cashing or Depositing a Money Order

If you receive a money order, you can deposit or cash it like a check. The easiest thing to do is probably to deposit the item in your bank.

Endorse the back and take the money order to a branch or ATM (mobile deposit of money orders is not always allowed). Funds should be available within a few days, and you can spend the money out of your checking account.

You can also cash money orders if you want the funds immediately. However, your bank (or any bank) might not give you the full amount immediately. If you need the full amount, you’ll need to go to the money order issuer (a Western Union desk, MoneyGram location, or a US Post Office, for example). Even if you visit the issuer, that particular location might not be willing or able to cash your money order – so call ahead and ask if possible.

For more details, see How to Cash a Money Order.

Alternatives to Money Orders

Money orders have their benefits, but there are often better ways to pay. Instead of traveling to a money order issuer, waiting in line, and paying a fee for every money order you need, you might be better off using a bank account (assuming a seller does not demand money orders for payment).

Personal checks are a valid form of payment in many places, and automatic electronic payments are even easier for recurring bills. For one time purchases, your debit card is always an option (or use a credit card online – especially if you’re not familiar with the retailer).