-> money order
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- The term money order stands for a payment order issued for a specified sum of money. Money orders are a safer and more trusted payment method than personal checks because the money is prepaid in the amount written on the money order. Any location of the U.S. Postal Service offers customers money orders for a small fee.
Money orders can be purchased for any amount and in this aspect, they are like certified checks. The major difference between money orders and certified checks is that with the former, the maximum face value is normally limited to certain figure. The U.S. Postal Service, for instance, has set a limit to domestic money orders in the amount of $1,000. It should be noted that money orders have certain drawbacks. For example, the brokerage sector does not usually accept money orders due to fears of money laundering. Second, a number of regulatory processing requirements have been set in place under the Bank Secrecy Act and the USA Patriot Act. The regulatory requirements are more compared to those applicable to certified checks, cashier’s checks, and personal checks. Many banking establishments, insurance companies, and brokerage firms do not accept them as a form of payment for these reasons.
In simple words, money orders are a payment instrument which orders an amount of money to be paid to another party. The payer has to go to the post office, convenience store, or grocery store in order to pay for the money order. This should be done in person.
Money orders do not have an expiration date and can be cashed at any time. This payment instrument is also popular among people who do not have bank accounts. Bills can be paid by mail without worrying about mailing cash or paying to wire money to another person. Any person with cash can go to the post office and buy a money order, meaning that no age requirements are set in place.
Cashier’s checks are issued by banks and work much like money orders, but they are a preferred payment method when considerable sums are involved. Cashier’s checks are useful in situations in which it is important to guarantee that the check will not bounce. These may be for making down payment on a real estate property or for escrow payments. Money orders are also guaranteed by issuers, but there is limit on the amount to be guaranteed.
Some credit unions and banks in the United States do not charge for money orders. They are generally considered a safe financial instrument which is not easy to forge. First, the left side of the money order displays a watermark with images of Benjamin Franklin. In addition, there is a security strip which runs along the watermark and a rainbow of inked tones and patterns. Postal money orders are also printed on a textured, clean, and crisp paper stock.
In addition to domestic money orders, there are international money orders which are quite similar to the domestic variety. The only difference is that they serve to make payments abroad. With international money orders, buyers are able to pay for services and goods to companies from other countries. The buyer’s bank is often the entity to issue such money order, which will be bought in a currency accepted by the seller. Much like domestic money orders, international ones are considered a safer payment method than sending currency. This is so because different forms of identification are necessary to cash the order such as photo identification and a signature. Finally, it is important to make sure that international money orders are an acceptable payment method in the destination country.