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Banking

A Guide to Money Orders

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

First issued by American Express in 1882, money orders are a convenient and widely accepted form of payment that are secured by a third party. You can purchase them almost anywhere in the United States, usually for a small fee. Below, we have outlined how money orders work, how much they cost and everything else you need to know.

What is a money order?

A money order is a certificate of payment that is secured by a financial institution or another third party. Much like a personal check, with a money order you assign a recipient, which reduces the risk of it being cashed by someone other than the intended payee. You’ll need to include your name and contact information, as well as the recipient’s, on the money order.

It is also a convenient way to pay bills if you don’t have a checking account. Because you need to pay for money orders in cash, the receiver never needs to worry about the money order bouncing or being returned for insufficient funds, as is possible with a personal check.

Example of a money order

4 Steps to filling out the money order:

  1. Write the name of the person you are paying.
  2. Fill out your information where it says something like Purchaser, Sender or From.
  3. Sign the money order
  4. Save your receipt! It’s very important to show a record of having paid for the money order if you lose or the recipient loses the physical money order. You can also find tracking information on the receipt to help recover it later.

When should you use a money order?

  • When you want to send a secure payment that is backed by a third party.
  • If you don’t have a checking account but need to make a payment and do not want to risk paying with cash.
  • When you don’t want to provide your bank account information.
  • If the person you are paying doesn’t have access to a bank account such that a personal check would be harder to cash.
  • If the recipient of the money order wants to ensure that the payment does not bounce or is returned for insufficient funds.
  • When you need to send money overseas and don’t want to send cash or a personal check. (International money orders are available and accepted by many countries.)

Where to get a money order

Money orders are prepaid, and you can buy them just about anywhere, including from the third-party vendors listed below:

  • Financial institutions, like banks and credit unions, offer money orders.
  • The United States Postal Service (USPS) offers money orders at all of its locations. You may send a money order domestically for a maximum of $1,000, and internationally for a maximum of $700.
  • Money transfer agents, such as Western Union and MoneyGram or other check-cashing outlets, carry money orders. Some of these providers have set limits on the amount that you can purchase.
  • Convenience stores and supermarkets, like Walmart, often provide money order vendors at their stores. For instance, Walmart offers money orders through MoneyGram.

How much do money orders cost?

You can get a money order by prepaying the full amount plus a small service fee charged by the institution; they can be purchased with cash, debit card or traveler’s check. However, because you prepay for a money order, it is like handing over cash. So, using a credit card to buy a money order is considered a cash advance by many banking institutions and you may be charged a fee associated with that service, which can get expensive.

Listed below are service fees associated with the standard third-party vendors that offer money orders:

  • Financial institutions sometimes waive service fees associated with money orders for certain customers. For instance, if you have a Chase Premier Plus Checking account, there is no fee for your money order.
  • The USPS charges a $1.20 service fee for money orders up to $500, and $1.65 for a money order in excess of $500. The fee for U.S. postal military money orders is $0.40. You can send a money order within the United States for as much as $1,000, or overseas for a maximum of $700 ($500 for El Salvador and Guyana) for a fee of $8.55.
  • Money transfer agents often have their own fees depending on their location. For instance, Western Union does not have a set fee rate. It’s best to check with the location from where you are planning to purchase the money order.
  • Convenience stores and supermarkets who are authorized agents will sell money orders for a small fee. For instance, Walmart charges a $0.70 fee for a money order of any amount, up to a maximum of $1,000.

Important things to know about paying with a money order

  • If you lose your money order: You may cancel a money order or request a refund (so it’s always wise to keep your receipt), but doing so often includes a fee. Western Union charges a $15 non-refundable processing fee for canceling or requesting a refund if you have your receipt, and $30 if you don’t. And, simply inquiring about a money order at the USPS incurs a fee of $5.95 (domestic) or $6.45 (international). If the money order has already been cashed fraudulently, you might not get a refund, but you can alert law enforcement.
  • If you cash your money order instead of depositing it: Cashing a money order at a check-cashing outlet, instead of bringing it to your bank, often requires a fee. But if you do need to cash it at a place other than your bank, consider bringing it to the same vendor that issued the money order, which might avoid fees.
  • Money orders can be targets for con artists: Because money orders are not used as regularly as personal checks, fake ones can be tough to identify. As a result, scammers may target money orders as a way to steal money. A common scenario when selling something on Craigslist, for example, is that the scammer will pay the seller with a money order that is more than the purchase price and ask for the difference back.

Alternatives to money orders

Although money orders are a secured, convenient form of payment, sometimes there are better options. For instance, you cannot get a money order for just any amount (there are maximums), and if you don’t have a checking account, it can become pricey to cash money orders consistently at check-cashing outlets. Listed below are some alternatives to using money orders:

  • Cashier’s checks: There is usually no cap on the amount of a cashier’s check, so you may purchase them in larger sums. Because a cashier’s check is issued by a bank and drawn from the bank’s funds, the recipient usually gets the money more quickly than with a money order.
  • Certified checks: Much like a cashier’s check, a certified check is also issued by a bank. The difference is that the amount of the certified check is withdrawn from a personal or business checking account and the bank account number is included on the check.
  • Wire transfers: This alternative is best if the recipient needs the money as quickly as possible. However, wire transfers are pricey and you need to know the recipient’s bank account and routing number. If you wire money in U.S. dollars from a Bank of America account to a financial institution within the U.S., it will cost you $30, and if you send it to an international account, it will cost $45.
  • Prepaid debit cards: If you’re using money orders because you don’t have a checking account, a prepaid debit card is another alternative. You can use them anywhere as long as you prepay with a set amount of cash.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Vivian Giang
Vivian Giang |

Vivian Giang is a writer at MagnifyMoney. You can email Vivian here

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Banking

Make Saving Fun with the 52-Week Money Challenge

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Everyone should treat saving money as a serious effort to accomplish serious goals. Building an emergency fund, accumulating a down payment for a home or saving up for a big purchase are all key objectives for your financial life, after all.

But sometimes it’s OK to take a more lighthearted approach to savings, like the 52-week money challenge. It’s a great way to gamify the process of stashing cash — although just because it’s fun doesn’t mean it’s an easy win. If you keep up with this unusual challenge for a whole year, you could end up saving nearly $1,400.

The 52-week money challenge explained

The 52-week money challenge — also referred to as the 52-week savings plan — makes saving a decent sum feel achievable by breaking it down into small steps.

Here’s how it works: You start by putting $1 in your savings account in the first week of the challenge. Then you stash away $2 in week two, $3 in week three, $4 in week four, all the way to $52 in the final week. At the end, you’ll have saved $1,378.

The idea is that by saving a little bit more each week, you’ll see your savings grow quickly and stay motivated to continue putting away money after the challenge is over.

“The 52-week money challenge gives you a place to start and have it all mapped out. If you can focus on it once a week, you can make it happen and know where you’re going to end up at the end of the year,” said Kelly Crane, CFP, president and chief investment officer of Napa Valley Wealth Management.

Why the 52-week money challenge works

Many people credit the 52-week money challenge with jump-starting their savings game. Here’s why:

  • It makes saving a habit: The 52-week savings plan forces you to commit to saving. When you visit your bank and transfer money from your checking account into your savings account each week for 52 weeks, saving becomes a habit.
  • You end up with a decent amount saved in the end: An abstract goal of “saving money” may not motivate everybody. For some people, the big prize at the end of the year helps them follow through with the savings habit.
  • It helps you set bigger financial goals: Your savings account balance is just a number — what you do with the money is what really matters. The balance saved in the challenge lets you think about the financial goals you’d like to accomplish, such as paying down student loans or accumulating a down payment for a mortgage.

Tips for nailing the 52-week money challenge

Ready to take the challenge? Here are a few things you can do to ensure you stick with the plan from week one through week 52.

  • Automate your savings: Most banks allow you to schedule deposits into your savings account. The simplest way to accomplish the challenge is to arrange ahead of time transfers to your savings account for the correct amount for each of the 52 weeks.
  • Don’t go in order: The order of the scheduled deposits helps make the challenge simple, but you don’t have to follow it to a tee. If you feel like you need to make deposits out of order, print out a copy of the plan and cross off different weekly amounts as you accomplish them. For example, if you get a tax return in the spring and can afford to save $52—the biggest weekly deposit—do it then and cross it off.
  • Engage in friendly competition: Find a savings buddy and start the challenge at the same time. Competition will keep you motivated to save, and maybe even open the door to sharing financial tips with each other.
  • Set reminders and smaller goals to stay on track: If you don’t want to automate your savings, set reminders on your phone, calendar or computer so you won’t forget. If you’re feeling overwhelmed by the higher amounts later in the challenge, break them down into smaller goals. In week 40, you could save $20 on Monday and another $20 on a Friday to hit your weekly goal in more manageable chunks.
  • Keep the challenge going for a second year: Once you hit the end of the 52 weeks, keep the momentum going into a second year. You could even try doubling the amount you save each week in year two. Try cutting out expenses that match the amount you save in a given week. Stash the second year’s funds in a CD to boost your savings.

Who might not like the 52-week money challenge

While this 52-week savings plan has universal appeal, it might not be the right choice for everyone. For some people, there are reasons to think twice:

  • People with a large amount of high-interest debt: Saving money can feel pointless if you’ve got a lot of debt collecting interest, said Crane. You might consider using your funds to pay down high-interest debt before pursuing the 52-week money challenge.
  • People with inconsistent income: Does your paycheck fluctuate week to week? You might feel like your income isn’t consistent enough to keep up with the plan.
  • If you tap into the savings too early: As you start to see your savings grow, it can be tempting to withdraw money to cover expenses or buy something you want. But tapping the savings too early might throw you off track and undermine the driver of the whole challenge: Ending up with a full $1,378 at the end of the year.

The bottom line on the 52-week money challenge

If you want to save money but you’re not sure how to start, the 52-week money challenge can give you the structure you need to finally get your finances in order — but it’s just a tool. Don’t be afraid to modify the plan to suit your needs, or ditch it altogether in favor of a more aggressive savings strategy.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Joni Sweet
Joni Sweet |

Joni Sweet is a writer at MagnifyMoney. You can email Joni here

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Banking

How to Ensure Your Mobile Check Deposit is Successful

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Banking on the go is one of the great conveniences of owning a smartphone. All major banks offer some form of mobile banking, and uptake among consumers is extremely strong. A 2018 Citibank ranked-choice survey found that 31% of respondents said mobile banking was their most-used app, behind only apps for social media and weather.

Not using mobile banking? Time to join the revolution. Read on for some basic tips that should help make you a mobile banking power user.

Get started with mobile banking

Mobile banking is broadly similar to logging on to your account online with a home PC or laptop. Nearly all banking apps let you check your balance, deposit checks, transfer money and set up custom account alerts. To get started, visit the app store offered by your mobile device and search for your bank or credit union. Carefully evaluate that you are selecting the correct app for your institution, then download and install the app.

Once you’ve installed the app, you will probably be required to set up a mobile account. This may be different than your existing online login, or the credentials may be the same for the standard online experience. Either way, the app should prompt you with easy-to-understand instructions.

One other point: Keep the app updated to ensure that the latest security measures are in place and bugs are fixed from previous versions. Newer versions of an app may have newer features. Many apps update automatically, but you should still check the settings on your phone to ensure you’re getting the updates you need.

Tips for a successful mobile check deposit

One of the premier features for mobile banking users is the mobile check deposit feature: Just take a photo with your device of the checks you wish to deposit, and submit them to the app. To ensure that the mobile check deposit process goes smoothly, follow these tips:

Take a clear photo

You want to make sure the photo is clear so that the information is prominently displayed. Consider putting the check on a table or a flat surface instead of holding the check. In addition, don’t have other objects in the frame such as other paperwork and use good lighting. Your mobile app may have a rectangular guide to show you how to take your photo, which makes sure you get it right.

Remove any check stubs

You want to make sure that your deposit only shows your check. If your check has a pay slip or another form of attachment like a check stub or voucher, detach it before taking a photo.

Enter the correct information

Even if your photo is clear, your deposit could get rejected if you’ve entered incorrect information. For example, your check may show an amount of $660, but if you accidentally enter $760 the deposit will be rejected. Double check all information before submitting your deposit.

Avoid redeposits

Mistakes happen. Maybe you forgot you’d already deposited a check, or someone in your family did so and never told you. If you redeposit a check, most places will either send you a notification of a duplicate deposit. Others may reject both deposits or charge you a fee. You may want to consider organizing your checks, perhaps by writing on the check itself that you deposited it, or putting it away in a separate folder.

Check to see if your mobile check deposit was successful

Your app should let you know if a mobile check deposit has gone through, and some banks also send a text or email confirmation message — but even if you receive this message, checks can still get rejected. Double-checking to see if the mobile check deposit went through is the safest bet, by looking at your account balance in your checking account. Depending on your bank, a mobile check deposit can take several business days to show up in your account.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Li Cain
Sarah Li Cain |

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here

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