A personal money order is a prepaid financial document that can be purchased at a post office or grocery store. It is like a certified check with a limit on its value and is more reliable than a personal check. Recipient information should be filled out to prevent it from being redeemed as cash.
A personal money order is a prepaid financial document signed and delivered to a recipient by an individual. Money orders are issued for a specified amount of money, and a personal one can be purchased at a post office or grocery store customer service counter. They’re sort of like a one-time bank checking account because the person buying the money order has control over the money and can stop payment if it’s lost or stolen. Money orders generally cost a small fee in addition to the value of the document.
Essentially, a personal money order is like a certified check, but there is a limit to how much it can be worth. This differs from a personal check because the money is already prepaid and held for payment, making it a more reliable means of accepting non-cash payments. Value limits are set by the financial organization issuing the money order. If a person needs more than a money order will cover, he can buy more than one.
A bank draft is a different instrument, and is purchased by a person, but is issued by a banking organization and often delivered to the recipient. They are most often used for international transactions because they can be purchased in the recipient’s currency to facilitate the transfer. Personal money orders are typically issued in the currency of the store where the money order was purchased.
Typically, when a person purchases a money order, they must fill out the recipient information on their own. In addition to the information supplied by the buyer, you can also list the organization issuing the money order and the amount. Using one can be good for situations where the buyer of the money order wishes to remain anonymous, for example, for gifting or charity purposes. For anonymity, the person who buys it can leave their information blank.
Most personal money order issuers recommend that the buyer fill out the recipient information before leaving the place of purchase. A money order with a blank addressee can be easily redeemed as cash, and a stop payment may be too slow to prevent it from being collected. Some buyers choose not to fill out the 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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