What is a Money Order and How Does It Work?

A money order is a prepaid payment instrument that functions similarly to a check, but does not require the sender to have a bank account. Because the funds are paid upfront at the time of purchase, money orders are considered a guaranteed form of payment, unlike personal checks, which can bounce if an account has insufficient funds.

Despite the growth of digital payment methods, money orders remain widely used. In 2025, the U.S. Postal Service alone issued approximately 53 million money orders. ^[1] Money Orders can also be purchased at banks, credit unions, grocery stores, and convenience stores and are commonly used to pay bills or send money when other payment methods are not accepted or available.

This article explains how money orders work, where to get one, what they cost, and what to consider before using one.

Key points

• A money order is a prepaid payment method that functions as a guaranteed alternative to cash or a personal check because the funds are paid upfront, it generally cannot bounce.
• Money orders are widely available at post offices, banks, credit unions, and retail stores, and do not require the sender to have a bank account.
• USPS domestic money orders are capped at $1,000 per order and never expire, though fees apply at the point of purchase and funds can be difficult to recover if lost or stolen.
• Fees for money orders can vary depending on where you purchase them.

How do you get a money order?

Purchasing a money order involves a straightforward process that can be completed at a post office, bank, credit union, or retail location.

1. Decide on the amount - USPS domestic money orders are capped at $1,000 per order. Most other providers apply the same limit. If the payment amount exceeds $1,000, multiple money orders will be required. ^[2]
2. Visit a provider and pay - Bring cash or a debit card; credit cards are not accepted at USPS locations. This applies at many other providers as well, though policies vary. You will pay the face value of the money order plus the applicable issuing fee.
3. Fill out the money order - Once purchased, the money order will need to be completed before it can be sent or delivered. You’ll need to include the payee name, purchaser information and a signature. If you’re paying a bill, you should also write the account number in the memo field ^[3]
4. Keep the receipt - Retaining the receipt allows the money order to be tracked and serves as proof of value if it is lost, stolen, or damaged. ^[2]

When would you use a money order?

Money orders are typically used in situations where a personal check is not accepted or where the recipient requires guaranteed funds. Money orders can be a useful option if a business or organization does not accept electronic payments, and the sender does not have a checking account. ^[4]

Common situations where a money order may be appropriate include:

• Paying bills without a bank account - According to the FDIC's 2023 National Survey of Unbanked and Underbanked Households, more than nine in ten unbanked households that used money orders reported using them to pay bills. ^[5]
• When the recipient requires guaranteed funds - Unlike a personal check, money orders generally don’t bounce because the funds are paid up front at the time of purchase. However, they can still be declined or delayed if they are fraudulent, altered, cannot be verified or the purchaser requests a cancellation, if not yet cashed. ^[6][7] This makes them a preferred payment method in transactions where the recipient needs assurance that the payment will clear. ^[8]
• When you want to avoid sharing personal banking information - No personal banking information appears on a money order, which can be preferable when sending payment to an unfamiliar party.
• When mailing a payment - Money orders can be sent by mail in situations where electronic payment is not an option and sending cash is not practical.

It is worth noting that money orders have limitations. Funds are difficult or sometimes impossible to recover if a money order is lost or stolen, and keeping track of the payment can be difficult without retaining both the money order receipt and a receipt of payment. ^[4]

Where can you get a money order?

Money orders are available from a range of providers. These include banks, credit unions, retail locations, and post offices. The most appropriate option will depend on factors such as whether the buyer holds a bank account, the fees charged, and convenience of location. ^[8]

U.S. Post Offices (USPS)

Money orders can be purchased at any Post Office location using cash or a debit card — credit cards are not accepted. USPS domestic money orders are capped at $1,000 per money order and never expire. As of March 2026, USPS charges $2.55 for money orders up to $500, and $3.60 for amounts between $500.01 and $1,000.

Fees are subject to change and should be confirmed at the point of purchase. USPS money orders can be cashed at a Post Office for free, or at most banks and some stores. ^[2]

Banks and credit unions

If you have an account at a local bank or credit union, this may be a convenient option, as the funds can be deducted directly from your account without the need to carry cash. However, fees vary by institution (often around $5), and some banks will only sell money orders to existing account holders. ^[8]

Retail and convenience stores

Many retail stores like Walmart also sell money orders, accepting cash or debit card payments. You can also get them at some grocery stores or convenience stores like 7-Eleven. These locations can be a practical option for those without a bank account or outside of standard banking hours. ^[6]

Financial services providers

Companies such as Western Union and MoneyGram sell money orders at various locations, including grocery stores, pharmacies, and dedicated check-cashing outlets. Be aware that not all Western Union locations that sell money orders are able to cash them. ^[7]

Money order FAQs

What happens if you lose a money order?

If your money order is lost or stolen, you cannot stop the payment, but you can replace the money order. With money orders through USPS, it can take up to 30 days to confirm that the money order has been lost or stolen, and it may take up to 60 days for it to be investigated. There is a $21 processing fee for replacing a lost or stolen money order. ^[2]

What happens if a money order is filled out incorrectly?

If you make a mistake when filling out a money order, you’ll need to act quickly to fix it, and you may have to pay additional fees. If you notice the error before you send the money order, most issuers will let you request a refund for uncashed money orders, though the processing fee for this could be around $15-$18.

If you’ve already sent the money order, you may still be able to request a refund if it hasn’t been cashed. But if the recipient cashes it, you won’t be able to get the money back. ^[3]

Is a cashier’s check different from a money order?

A money order is a secure way to send a payment of up to $1,000, and you do not need to have a bank account to send one. A cashier’s check is also a secure way to send transactions, but these usually have no limits on the amount you can send, and they are funded through cash or a bank account. Typically, you’ll need to have an existing bank account with the bank you’re getting a cashier’s check from, and you will usually have to pay a fee between $5 and $15. ^[9]

Bottom line

A money order is a prepaid payment instrument that functions as a guaranteed alternative to cash or a personal check. Because the funds are paid up front, a money order generally cannot bounce. They are widely available at post offices, banks, credit unions, and retail stores, and are commonly used to pay bills or send money by those who may not have a bank account.

USPS domestic money orders are capped at $1,000 and never expire, though fees apply at the point of purchase, and funds can be difficult to recover if a money order is lost or stolen.

Sources

1. Federal Reserve, “Postal Money Orders Processed by the Federal Reserve” https://www.federalreserve.gov/paymentsystems/check_postalmosprocqtr.htm Accessed April 9, 2026
2. USPS, “Money Orders” https://www.usps.com/shop/money-orders.htm Accessed April 9, 2026
3. Bankrate, “How to Fill Out a Money Order” https://www.bankrate.com/banking/how-to-fill-out-a-money-order/ Accessed April 9, 2026
4. CFPB, “Exploring Different Ways to Pay Your Bills” https://www.fhi360.org/wp-content/uploads/drupal/documents/cfpb_building_block_activities_exploring-different-ways-pay-your-bills_handout.pdf Accessed April 9, 2026
5. FDIC, “2023, “FDIC National Survey on Unbanked and Underbanked Households” https://www.fdic.gov/household-survey Accessed April 9, 2026
6. 1st United, “Protect Yourself from Money Order Scams” https://www.1stunitedcu.org/more-for-you/financial-wellness/protect-yourself-from-money-order-scams Accessed April 9, 2026
7. Experian, “Can You Cancel a Money Order?” https://www.experian.com/blogs/ask-experian/can-you-cancel-a-money-order/ Accessed April 9, 2026
8. Bankrate, “Where to Get a Money Order” https://www.bankrate.com/banking/where-to-get-money-order/ Accessed April 9, 2026
9. Citizens Bank, “Cashier’s Check Vs Money Order Vs Certified Check” https://www.citizensbank.com/learning/cashiers-check-vs-money-order-vs-certified-check.aspx Accessed April 9, 2026

About the author

Becca has over 10 years of experience as a content writer, working across various industries including finance, digital marketing, education, travel, and technology. Her work has been featured in publications including Forbes, Business Insider, AOL, Yahoo, GOBankingRates, and more.