How Much Does a Money Order Cost?
Money orders are a fast and convenient way to turn cash into a check. A money order can usually be processed at a variety of places such as the post office, supermarket, bank or even a convenience store. The post office is by far the most common place to purchase a money order. A money order is basically a check that is not connected to your bank account. If you owe somebody money and would like to pay them in cash, this can be dangerous. Taking a lot of cash on vacation can also be dangerous, so money orders can be used to prevent the chance the money getting lost or stolen. When you go to purchase the money order, the first thing you will do is specify the amount of the check as well as the recipient. The institution will then give you a check stub that acts a receipt to prove that you have paid the amount of money recorded on the money order. The cost of a money order will depend on the store at which you get it and the amount of money that you are going to need.
How much is it?
- On average, a money order will cost anywhere from $0.70 to as much as $10 if you choose to go to a bank. If you bypass the banks, however, you should only have to budget anywhere from $1 to $3.
- For example, Walmart.com claims that a standard money order can cost $0.70.
- At the post office (USPS.com), a money order that is from $0.01 to $500 can cost $1.15, while a money order for $500 to $1,000 will cost $1.55. These prices are valid as of January 2013.
- At the post office, if the money order is going to be sent to a military member, the cost can be as low as $0.30.
- Purchasing a money order online can cost as much as $5 to $10 per $1,000 needed.
What is going to be included?
- Money orders will always be valid and they will never expire. However, the only two people that can cash them are the person to whom it is written and the person who purchased it.
- USPS has a list of countries that can cash money orders.
- Similar to a cashier’s check, a money order will usually have a cap to how much you can put on it. While a cashier’s check is backed by a bank account, a money order will be backed by smaller organizations; because of this, some deem a money order as being less secure.
- The security that is offered by money orders is that this check will never bounce. With regular checks that are connected to your bank account, you can bounce a check when someone cashes a check you have written while you have insufficient funds. With a money order, there are guaranteed funds backing up the check.
- The post office and banks should have some type of watermark or seal on the money order to show that it is backed by an approved institution. Fraudulent money orders have been issued, so the post office or a bank is the safest place to purchase one.
What are the extra costs?
- Single money orders will have a maximum limit that is usually around $1,000. So if you had to purchase $1,500 worth of money orders, you would have to purchase two separate money orders, which means you will have to pay for each one.
- International money orders can cost $3 to $6.
- Some companies such as the USPS and Western Union can replace your money order for a fee that ranges anywhere from $5 to $35.
Tips to know:
- If you are insistent on getting a money order through a local bank, they may want you to have an account before they process it for you.
- For those sending money orders overseas, you may be limited to an amount that is less than $1,000. Usually, it is around $700.
- Talk with the business or person before handing over a money order. Because a money order can easily be faked, some companies will only accept a cashier’s check.
- In certain situations, the small charge of a money order is well worth it to avoid the risks of losing your money or bouncing a large check.
How can I save money?
- Try to avoid the banks if you want to get a money order for the lowest amount. Instead, consider a cheaper alternative such as the local post office or even retailer such as Walmart.
- For larger purchases, consider getting a cashier’s check rather than a money order. As mentioned in the extra costs, you will have to pay a fee for every $1,000 or so. If your money order is for more than $2,000, it is probably best to look into local cashier check rates.
- To avoid going to a local store, consider sending money online via services such as XOOM.com. Here, money can be sent for as little as a few dollars.