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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Usually, an individual who is purchasing a bank money order will have the funds automatically withdrawn from his or her checking or savings account, then turned into a money order.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.
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.
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.