A money order is a paper payment method, similar to a check because it’s prepaid and issued for a specific amount of money. It’s a secure alternative to cash.
You can buy a money order with cash or a debit card at your post office, bank, or retailer.
In this article, we will discuss:
How money orders work
What are the advantages & disadvantages of using money orders
Where to get a money order
How much does a money order cost
Alternatives to using money orders
Let’s get started!
How do money orders work?
You can purchase a money order with cash or a debit card at various locations like:
The post office
Credit unions or banks
Retail stores like Walmart
Before you get the money order, you need to share the exact amount of money you want to send because they are prepaid.
Once you get the money order, you need to fill it out with your name and the recipient’s name. You might also have to put the recipient’s address.
Double check all the details because if you make an error, it would be impossible to cash the money order.
Based on the amount of money you’re sending, you’re going to pay between CA$1-CA$$5 for the money order.
Once you fill out the money order, you deliver it to the recipient either in person or by mail. Make sure you keep a receipt or a carbon copy of the money order for your records and tracking purposes.
The recipient can cash the money order at:
A bank
Credit union
Check-cashing service
They will need to endorse the back of the money order and identify themselves. Once they do that, they will get the funds immediately.
Money orders are a secure payment method because they use special paper as well as watermarks to prevent fraud.
Every money order has its own unique serial number, so it’s easy to track. If you lose it or someone steals it, you can trace it and issue a replacement.
What are the advantages & disadvantages of using a money order?
Here’s a detailed breakdown of all the pros and cons of using a money order:
| Advantages | Disadvantages |
| You’re guaranteed to receive money as the recipient because the money order is prepaid. | You might pay between CA$1 to CA$15, depending on the amount of money you’re sending. This makes the money order more expensive than personal checks or cash. |
| Money orders are safer than cash because they can be cancelled. You can also reissue them if they are lost or stolen. | You can only send up to CA$1,000 with one money order.
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| You don’t need a bank account to get a money order.
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They are a lot less convenient than checks because you have to buy them at a specific location.
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| Almost all institutions and people accept money orders.
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Money orders are a lot slower than electronic payments.
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| Once you cash in the money order, you get your funds immediately.
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Not all places that sell money orders can cash them.
Banks might have fees for non-customers if you want to use them to cash your money order.
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| A money order doesn’t have an expiration date as long as it’s legitimate. | It can be difficult to replace a money order if you lose it. |
Where can you purchase a money order in Canada?
In Canada, you can get a money order from:
Canada Post
Most Canada Post branches will provide you with money orders. The maximum amount of money you can send per money order is CA$999.99, and there’s a fee of CA$8.50 per money order.
Banks and credit unions
Banks like RBC, CIBC, BMO, TD Bank, and Scotiabank also offer money orders. Their fees and limits vary.
Convenience stores and pharmacies
Stores like Walmart and 7-Eleven may sell money orders.
Here’s how you can get a money order in Canada:
Go to a location that offers them
Share the following information with the clerk:
Your name
The recipient’s name
The amount of money you’ll be sending
Present a valid government-issued photo ID
If you’re getting CA$3,000+ or money in money orders.
Pay for the money order
Also, pay all the applicable fees using cash or a debit card
Fill out the money order with:
The payee’s name
Your address
Keep the receipt portion of the money order for your records
You’ll get a tracking number that allows you to check the status of the money order.
How much does a money order cost?
The cost of the money order is based on two factors:
The issuer
The amount of money you’re sending
Here’s a comparison table:
| Location | Fee |
| Canada Post | It costs CA$7.50 for money orders up to CA$999.99 |
| Banks or Credit Unions | You pay between from CA$4 to CA$10, depending on the institution and the type of account you have. |
| RBC | You pay CA$7.50 for money orders up to CA$999.99 |
| CIBC | CA$9.95 |
A few factors that might impact the cost of a money order:
Issuer
Amount of money
Account type
The location you’re sending the money to
You need to compare the fees between the different issues to find the best option for you.
Alternatives to Money Orders
Money orders are secure and reliable if you want to send funds, but there are several alternatives available, each with its own advantages and disadvantages.
Here are a few different options you can consider:
| Option | Advantages | Disadvantages |
| Personal checks | Cheap and convenient if you have a checking account. | Not as widely accepted as money orders. |
| Cashier’s checks | More secure than personal checks. | Have higher fees than money orders. |
| Electronic transfers | Fast and secure. | You need to have a bank account, email address or a mobile phone. |
| Wire transfers | You can send money domestically or internationally in a fast and secure way.
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You pay higher fees, especially for international transfers. |
| Payment apps | You can send money to other people that use these apps a lot faster than if you used money orders.
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Have hidden fees and limitations. |
| Prepaid debit cards | You can use them to purchase items. | You pay activation fees and monthly maintenance fees. |
If you’re curious, you can learn what’s the difference between checks and money orders here.
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