3 advantages of money orders vs. cash you might not know

Money orders are a guaranteed method of payment, like cash. Often they're also your best choice. But why? Here are their three advantages over cash you might not know.
If you do not have a chequing account, a money order is another option of payment instead of a personal cheque. Instead of sending cash via mail, money orders are a much safer means of transmitting money via the post office. But why choose a money order over the cash equivalent?

3 advantages of money orders vs. cash you might not know

Advantage #1: Money orders are traceable

Each time one makes a money order, a receipt is given which details the date of purchase, the amount of money and a banking code that can be used for tracing purposes. If lost or stolen, money orders can be replaced—unlike cash.

Advantage #2: Funds are guaranteed

With money orders, the sum is already paid out of your bank account. This means the recipient is guaranteed to receive the funds. Some people find money orders a useful way of conducting business and preventing overdrafts.

Advantage #3: They're convenient

To get a money order, you don't need a bank account. Most banks will sell a money order to customers who do not have a chequing account. Other vendors include the local post office. You can pay for them with cash.

Facts about money orders

  • Money orders can be bought with cash, but there are also other options that include use of a debit card, traveller’s cheque or withdrawal from a bank account.
  • Most banks have a cutoff limit set at $1,000 per money order. If one needs to send more than $1,000, then multiple money orders are required.
  • Money orders are not free. The cost depends on where you buy them, but fees generally ranges from one to five dollars.
  • When buying a money order, you may need to show photo identification.
  • Always ask the vendor if the money order has an expiration date. Some money orders do, while others do not.
  • Always read the fine print about lost and stolen money orders, and requirements for cashing a money order.

Finally, make sure that you go to a reliable source to place your money order. Sophisticated scammers have infiltrated the world of banking. Not only are fake money orders issued, but in some cases the recipient is sent a fake money order with a higher dollar amount than what the sender had promised. If ever in doubt verify the authenticity of the money order when receiving it in the mail. In an emergency, money orders can be bought online and also at some 24-hour convenience stores.

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