Fact Checked

What is a Personal Money Order?

H. Bliss
H. Bliss

A personal money order is a prepaid financial document that is signed and given to a recipient by an individual. Money orders are issued for a specified amount of money, and a personal one might be purchased at a post office or grocery store customer service counter. They are somewhat like a single-use bank checking account because the person who purchases the money order has control over the money and may place a stop payment on it if it is lost or stolen. Money orders usually cost a small fee on top of the value of the document.

Essentially, a personal money order is like a certified check, but it has a limit on how much it can be worth. This differs from a personal check because the money is already pre-paid and held for payment, so it is a more reliable means of accepting non-cash payments. Value caps are set by the financial organization that issues the money order. If a person needs more than a money order will cover, he can purchase more than one.

Personal money orders may be bought at a post office.
Personal money orders may be bought at a post office.

A bank money order is a different instrument, and it is purchased by a person but issued and often delivered to the recipient by a banking organization. They are more frequently used for international transactions because they can be purchased in the recipient's currency for easy transfer. Normally, personal money orders are issued in the currency handled by the store where the money order was purchased.

Usually, when a person buys a money order, he must fill in information about the recipient on his own. In addition to the purchaser's supplied information, it may also list the money order issuing organization and the amount. Using one can be good for situations in which the purchaser of the money order wishes to remain anonymous, like for gift or charity purposes. For anonymity, the person buying it can leave his information blank.

Most personal money order issuers recommend that the buyer fill out the recipient information before leaving the purchasing location. A money order with a blank recipient can easily be redeemed like cash, and a stop payment may be too slow to prevent it from being cashed. Some buyers choose not to fill out recipient information because they want to keep the information private or are purchasing the money order for someone else to use.

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Discussion Comments


@SurfNTurf - I think that a cashier’s check is like a money order that is drawn from the same issuing bank. For example, I needed to get a cashier’s check from my bank when I was registering for a real estate auction. Sometimes there are fees associated with it, but my bank does not charge for a cashier’s check.

However, when I am renting out my condo, I always require a money order for the security deposit and subsequent rental payments because many of the renters are out of state because it is a resort property.

I like the security aspect of the money order and I don’t have to worry about the checks bouncing. I think that this is why some people prefer a money order. I know that I can deposit my money order at my bank with no problem. I think that the two types of checks serve basically the same purpose. They are just more secure types of payments.


What is the difference between a cashier’s check and a money order? I always get those two confused.

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    • Personal money orders may be bought at a post office.
      By: chrisdorney
      Personal money orders may be bought at a post office.