A money order is a negotiable instrument used by customers to pay for goods and services in the United States. A postal order is similar, but used in most countries worldwide.
They are both types of orders used to transfer money from one person to another. However, they have some differences. Read this article to learn more.
What is a Money Order?
A money order is a way to pay for anything with cash using a third-party check. You pay for the money order, and a third party sends you a check that you may hand or mail to another person.
This individual deposits the money order into their bank account or swaps it at a company or post office for cash.
What is a Postal order?
Postal orders are still a viable means of payment, despite the fact that many of us have switched from paper to smartphone or contactless payments. Postal orders are still available for purchase at the Post Office, despite their diminished popularity.
Prior to the 1960s, when many people did not have bank accounts, postal orders were a popular way of payment. This implies that they were unable to write paper checks to pay for large expenses such as rent, energy bills, and wages.
Postal orders provided a secure option to paying for anything in cash. You can use a postal order to pay for mail orders and some government things, such as a driver’s license, however it is not accepted everywhere.
What Is the Difference between a Money Order and a Postal Order?
There are a few significant distinctions between a money order and a postal order, despite the common misconception that they are the same sort of financial transaction.
These distinctions pertain to where the instruments are acquired, where they may be exchanged for cash, and who will accept each form of payment. In other nations, the amount of danger connected with each differentiates between the two further.
One of the most significant distinctions between a money order and a postal order is where the instruments may be acquired. A postal order is acquired directly from a national postal system, such as the United States Postal Service or the British Post Office.
A money order, on the other hand, is issued by an independent financial service provider and sold at a variety of retail locations, including supermarkets and pharmacies.
Another significant distinction between the two instruments is their reputation. There are exceptions, but creditors are often more ready to accept a money order issued by the United States Postal Service than one issued by an independent financial services firm.
The impression that postal orders are more difficult to fabricate than money orders issued by other companies is one explanation for this. In addition, certain suppliers are typically sluggish to fulfill payments, which may cause some creditors to delay crediting client accounts until the money are really received. In contrast, postal orders may have their face value sent instantly, as the likelihood of forgery or other problem is quite minimal.
The ability to cash the financial instrument is an additional distinction between a money order and a postal order. Many banks and most post offices will instantly honor a postal order by paying cash to the customer who presents it.
Money orders, on the other hand, may not be eligible for quick cashing. Instead, the presenter would have to put the order into a bank account and wait for the bank to clear the funds. This is an additional reason why many creditors may accept postal orders but may reject money orders.
Both orders are legitimate options for transferring money and submitting payments. Since the postal order is often seen as the more dependable of the two possibilities, it is likely the superior option when there is uncertainty regarding where the money would be cashed.
Numerous businesses provide detailed instructions for utilizing money orders and postal orders, including information on how long it takes for each instrument to post to a credit account, making it easy to identify which instrument to use in a given circumstance.
Where Can I Cash a Postal Money Order?
Your Post Office money order may be cashed at a variety of locations. Local United States Postal Service locations are the best place to begin. There, you may cash your postal money order for free. Keep in mind that if your nearest branch is a retail store, it must have sufficient cash on hand to redeem your money order.
You may not be able to cash your postal money order if you attempt to do so early in the morning, as retail transactions will bring in cash throughout the day.
Banks and Credit Unions
The second-best locations are banks and credit unions. Depending on the institution, a nominal fee may be assessed for cashing the instrument. When submitting a postal money order to your own bank, keep in mind that it may be subject to your institution’s policy on funds availability.
Grocery Stores and Big-Box Retailers
Many supermarkets and major retailers, such as Walmart, still cash checks and money orders. However, the most of these come with fees, and there may be a maximum monetary amount. In other words, checks and money orders that exceed this amount will not be cashed.
Call the shop ahead of time to confirm whether these services are offered. These businesses often charge fixed fees for check cashing, such as $4 for checks up to $1,000.
Check Cashing Centers
If you lack a bank account and are unable to access the Post Office or a retail establishment, a check cashing facility may be your next option. Prepare yourself to pay for these services.
Most charge a percentage of the amount of your cheque or money order. These percentages may vary between 2% and 10%. Therefore, if you cash a $500 money order, you may have to pay up to $50 in fees to receive your cash.
Convenience Stores and Gas Stations
If you lack a bank account and are unable to access the Post Office or a retail establishment, a check cashing facility may be your next option.
Prepare yourself to pay for these services. Most charge a percentage of the amount of your cheque or money order. These percentages may vary between 2% and 10%. Therefore, if you cash a $500 money order, you may have to pay up to $50 in fees to receive your cash.
Can a Post Office Money Order Be Forged?
While postal money orders are more dependable than other instruments, they can nonetheless be counterfeited by exceptionally skilled criminals. These con artists typically attempt to defraud internet merchants by mailing them counterfeit money orders.
They also target the general public with strategies such as the promise of substantial benefits for depositing and submitting the money order.
Thankfully, there are still methods for distinguishing genuine postal money orders from counterfeit ones. The maximum amount for domestic Post Office money orders is $1,000, while the maximum amount for foreign Post Office money orders is $700.
Anything beyond these sums is absolutely fraudulent. When held up to a light source, legitimate money orders will also contain a Benjamin Franklin watermark on both sides. In addition, a dark security thread will run from top to bottom to the right of the watermark, with the initials “USPS” flowing in both directions.
How Can I Avoid Money Order Scams?
To prevent being victimized, you must be able to identify a money order fraud. The “deposit aid” scheme and the use of counterfeit money orders as payment for products have already been discussed. However, there are a few different strategies that crafty criminals may employ:
Buyer’s remorse: the con artist sends you a payment and then backs out of purchasing your items, but offers to let you retain a portion of the amount as “goodwill.”
Similar to buyer’s regret, the fraudulent payment is for an apartment or property. In this instance, though, the offender wants all the money back immediately.
The thief sends you a money order for an amount greater than the amount owing. They then remark, “Oops!” and request that you return the difference. Prior to depositing or cashing a money order, you must verify its funds. Compare the money order to the issuer’s sources to check its authenticity.
If the sender urges you to act immediately, this is a major red sign. In addition, you should never take checks or money orders as payment when selling on eBay or comparable platforms. Always demand on payment via routes that may be traced.
Examples of when to use a money order or cashier’s check
Transactions that may involve a money order or cashier’s check include obtaining an apartment lease, purchasing a used vehicle, closing on a house purchase, and transferring money over the mail.
When the payee wishes to ensure that the payer has the monies, cashier’s checks or money orders are typically necessary. In order to get a cashier’s check or money order, the whole amount must be paid to the issuer in advance, eliminating the possibility of a payment bounce.
A cashier’s check or money order is guaranteed and can only be cashed by the intended recipient. The issuing bank completes the “pay to” line on a cashier’s check, which helps prevent the check from being fraudulently cashed if it is lost or stolen.
Where to buy cashier’s checks and money orders
The purchasing of cashier’s checks is possible at banks and credit unions. If you have a bank account, your bank may not charge you a fee for a cashier’s check, or it may charge you less than a non-customer would.
Many banks offer cashier’s checks to non-account holders; however, not all banks do so. Be prepared to pay a price.
Money orders are available in several locations. In addition to banks and credit unions, numerous grocery stores, convenience stores, check cashing businesses, and the United States Postal Service issue them.
Money orders are a suitable option for minor transactions due to their low cost. The United States Postal Service charges $1.45 for money orders up to $500 and $1.95 for those between $500.01 and $1,000.
Money orders are also sold by retailers, with some offering more affordable rates. Prices, buying restrictions, and availability may vary by retail location. Before purchasing a money order, make sure you have a valid picture identification with you.
Walmart: $1 maximum charge
CVS: $1.25 maximum charge
Fees at Kroger begin at $1 with a Shopper’s Card and $1.10 without one.
99 cents for sums up to $500 at Publix
$1.39 for payments up to $500 at 7-Eleven (not all 7-Eleven stores sell money orders)
89 cents is the minimum fee charged by ACE Cash Express (a check-cashing business with over 850 locations).
Are cashier’s checks safer than money?
A cashier’s check is more secure than a money order since the “pay to” section is completed at the point of sale by the issuing bank. After presenting identification, only the payee can cash or deposit the cheque.
With a money order, however, the purchaser is responsible for filling out the payee’s name; if this is not done promptly and the money order is lost or stolen, it can be cashed by anybody.
Before cashing or depositing a cashier’s check into your account, you should verify its legitimacy with the issuing bank because fraudsters do attempt to forge these.
If lost or stolen, it is more difficult to replace cashier’s checks than money orders. The bank that issued the check may compel you to purchase a surety bond from an insurance provider in the amount of the check. The indemnification bond holds you, not the bank, liable for any damages incurred if the check is cashed.
Before issuing a new check, the bank could also require you to wait 30 to 90 days.
It is less difficult to replace a stolen or misplaced money order. If you have the original receipt, the store from where you purchased the item may replace or refund it. Almost certainly, a price will be required for the service.
Every payment method entails some inherent risk. For those without a bank account, cashier’s checks and money orders are viable alternatives.
A money order is a legal tender instrument that can be cashed at any bank in the country. A postal order is similar, except that it is used primarily in the UK and is issued by post offices.
A postal order can be used to pay postage on items mailed to a recipient in another part of the UK. There is a slight difference between a postal order and a British cheque.
The best place to cash a money order is at a bank or money exchange. You can also use the post office to cash money orders.
Why do people use postal money orders?
How much is a postal money order?
When would you use a money order?
What is a USPS money order?
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