How to Cash a Postal Money Order

The Federal Reserve processes approximately 330,000 postal money orders worth about $81 million each day, which shows just how often this form of payment is still used. This could be because money orders are a secure way to pay for goods and services. If you own a rental, you might have a tenant give you a money order to cover the first and last month's rent as a guarantee the check is good. You could sell an item online and ask the buyer for a money order as payment. You might even receive a money order in the mail from a family member as a birthday gift. No matter who gave you the postal money order, you'll need to know how to cash it.

How to Cash a Postal Money Order
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Visit Your Local Post Office

Your best bet is to take the money order to your local post office. The U.S. Postal Service charges a fee when issuing money orders, but not when cashing them. Endorse the money order in front of the postal clerk and then present it along with a photo ID that also includes your signature. The USPS employee will verify the picture on the ID is of you, then compare the signature on the money order with the signature on your photo ID. If everything checks out, the postal worker will give you the exact amount printed on the money order.

Head to Your Bank or Credit Union

It's also possible to cash the postal money order at the bank or credit union where you have an account. Just as you would at the post office, you'll need to sign the money order in front of the teller and provide a valid ID. You'll also need to give the teller your account number. Your bank or credit union likely won't charge a fee for cashing the postal money order. It is important to note that retail shops or check-cashing businesses probably will charge a fee, however. For example, a Your Exchange Check Cashing location will charge 5 percent of the value of the money order to cash it. Cashing a $200 postal money order would cost $10 at such a business, therefore.

If you'd rather, you can deposit the postal money order into your bank account and then use your debit card later to withdraw the funds from an ATM or use the money to pay for purchases at grocery and retail stores. This eliminates the need to carry cash, which can be easily lost or stolen.

Beware of Fraud

Although postal money orders are as safe, or safer than, other money orders, they are still susceptible to fraud. If you think the money order you received could be a fake, call the Money Order Verification System at 1-866-459-7822. Fake postal money orders may be void of the Ben Franklin watermarks, contain a value over the $1,000 maximum limit or have a dollar amount that isn't printed twice. Victims of fraud will need to contact the U.S. Postal Inspection Service at 1-877-876-2455.