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What Is a Bank Money Order?

B. Miller
B. Miller

A bank money order is simply a money order that is purchased from a bank, rather than a grocery store or post office, which are other locations where money orders can be obtained. A bank money order is not the same thing as a cashier's check, which is a check that is drawn on the bank's own funds. A money order is purchased and prepaid by the buyer; the funds are then available on the money order, which is often used in lieu of a personal check.

Usually, an individual who is purchasing a bank money order will have the funds automatically withdrawn from his or her checking or savings account, then turned into a money order. Of course, it is also possible to simply walk into the bank with cash and purchase a money order that way. He or she can then make the money order out to whomever he desires, by filling it out and signing it like a check. A money order does not contain any identifying information, such as a checking or savings account number, and the purchaser's name or address are not printed on it. There is typically a small fee associated with purchasing the money order.

Money orders may be used to pay bills, or to make credit card payments.
Money orders may be used to pay bills, or to make credit card payments.

A bank money order, or any type of money order, is considered a very secure form of payment because it is prepaid. The issuing bank will print or stamp the amount of funds that are included in the money order. Of course, if one ever receives a money order, it is important to verify that it is legitimate and has not been altered. If the money order is cashed and it does not "clear," the person who cashed it will be responsible. There are typically limits as to the maximum amount that can be purchased on a money order, whereas a cashier's check will typically not have these limits.

Bank money orders are purchased and prepaid by the buyer, and can be written in lieu of a personal check.
Bank money orders are purchased and prepaid by the buyer, and can be written in lieu of a personal check.

A bank money order is a good way to pay someone after purchasing something online, for example. Some people also use money orders if they are not able to get a checking account for any reason, such as a history of too many bounced checks. Money orders may be used to pay bills, or even to make credit card payments. It is very important to always keep the receipt as well as the duplicate copy from the completed money order, because it is the only form of proof that the money order was sent.

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Discussion Comments


How good are they if if the date is three years old?


@georgesplane- Probably the most secure method is to wire the money. Banks are insured and moderately regulated. Money sent through a wire will usually reach the recipient in a matter of hours, maybe a little more if the wire is international. The biggest downside to a bank wire is that it can take months to sort out a problem if the wire is lost. Wires do get lost and banks do drag their feet on finding the lost wire (I know from personal experience).

Online money transfers are very safe, but the fees can be a bit high. Services like paypal will charge about 3% for a large transfer.

Another safe option is to overnight a check, but it could take a few days for the money to clear if the recipient uses a different bank.

In my opinion, a money order is the worst method for sending money. If the money order is lost, it is almost impossible to cancel. I would recommend you use a bank wire or online money transfer.


Is it safer to send large amounts of money through a wire money transfer or a bank money order? I need to send a few thousand dollars across country so I am trying to find the best way to do this. I want something fast (2-3 days), secure, and relatively cheap (less than 2% of transaction).


@Amphibious54- My guess is that banks are just trying to make money, the work involved and the materials required are definitely not worth the high fee for a bank money order. My bank nickel and dimes me to death, but so does every other.

I prefer purchasing postal money orders because the federal government issues them and they only cost a dollar. I might have to wait in line for ten minutes, but it is better than a bank reaching in my pocket and pulling out a half hours wage and then trying to upsell me on some new fee laden credit card.


@Chicada- I will never enter into a private transaction that requires one party send a money order, regardless of the type of money order, but I will do transactions that involve bank money orders.

When I sell big-ticket items I tell the person to meet me at the bank, and we do the deal right there under the bank surveillance system. I have been a victim of receiving counterfeit cash, although the counterfeit cash I was given would fool most people. Once we have agreed to finalize the transaction, we walk into the bank to buy a money order on the spot.

I will take five or ten dollars less for an item to make sure that the money I am receiving is legitimate. I usually list these items a few dollars higher than I am trying to get anyway, so I can bargain for the best possible deal for myself. Transactions can be safe, but you have to think smart, and keep the risk out of your hands.


Are bank money orders any safer to accept for private party transactions than other money orders like Moneygram or Western Union? How do you tell if a bank money order is authentic, or false? Are bank money orders subject to any of the crazy Nigerian frauds like other money orders? I am trying to sell a computer in an online classified, but there are so many con artists and scammers to be aware of when trying to sell things online.

I recently went to meet a person who tried to pass of counterfeit (poorly counterfeited I should say) hundred dollar bills. I had the con arrested (he actually tried to take the computer and run after I told him I was not taking his fake money), but I would prefer not to deal with shady people in these types of transactions. Basically, I just want a safe way to perform a transaction on an online classified. Should I have the buyer get a money order from a bank? Is this a better idea than gambling on whether or not a stack of cash is real? What ever happened to an honest cash deal?


Why do banks charge such a high money order fee? My bank charges $10 for a money order, even though I am a customer. I can go to the drugstore down the street and purchase a money order for fifty cents. Is there some special security feature that makes bank money orders better.

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    • Money orders may be used to pay bills, or to make credit card payments.
      By: WavebreakMediaMicro
      Money orders may be used to pay bills, or to make credit card payments.
    • Bank money orders are purchased and prepaid by the buyer, and can be written in lieu of a personal check.
      By: Alex Hinds
      Bank money orders are purchased and prepaid by the buyer, and can be written in lieu of a personal check.