Similar to a personal cheque, money orders are printed certificates with a certain amount. Unlike cheques, they must be purchased. Only certain places such as Australian Post Offices sell them and they cost under $5.
You can purchase money orders from certain banks, post offices, or even exchange agencies.
Money orders are similar to regular cheques, and to fill them out you will need to:
– Write the recipient’s name
– Put in your address
– Add an account number
– Sign the money order
Simple! Right? Make sure to read more about cheques and how to use them!
Let’s thoroughly go through the steps on how to fill them out.
Step 1: Write the recipient’s name
This step is self-explanatory. You just need to fill out the name of the payee (whether it’s a person or company). The line that says it usually has “Pay to” or “Pay to the order of” written there.
You can’t make any changes to money orders, therefore, make sure you write all the information.
Step 2: Put it in your address
After filling in the recipient’s name, you’ll find a “purchaser” line where you’ll have to write your address. If you are the purchaser, you should still write your mailing address. Other words written instead of “purchaser” could include: “From”, “Sender”, or “Drawer”.
Having your address written on it allows the recipient to contact you to verify it.
Step 3: Add an account number
Money orders usually require the payer to fill in their account number. This allows payees to know which account to credit in the event you’re paying a bill.
Step 4: Sign the front of the money order
The last line on the money order is for the payer’s signature. The line may say “Purchaser’s signature”. Make sure you only sign the front as the back is for the recipient’s signature.
Just like everyday purchases, it’s best to keep receipts. Keeping the receipt provides you with proof of purchase in the event the money order is stolen or lost and you need a refund. Receipts also allow you to track the money order and see when it gets deposited. All you’ll need is a tracking number or money order number that would be written on the front.
Some payments are too large, that cash just isn’t an option. That’s when money order is your best option. When getting one, you will need to pay upfront. That guarantees the payee that it will not bounce.
The best thing about money orders is that you can send them without having a bank account! Your recipient doesn’t need a bank account either.
There are a few disadvantages that you need to consider. Generally, they have limits per day. That limit is usually around $1,000. Therefore, if you need to make a payment bigger than that, you will need to purchase multiple.
As mentioned before, they cost a small fee. Although that fee is usually under $5, it’s best to always keep that in mind so you’re not surprised when purchasing one.
The most common alternatives are cashier’s cheques or bank cheques. Those options function similarly to money orders. However, bank and cashier’s cheques must be purchased from a bank or credit union.
You may also want to consider a digital transfer. Contact your bank to increase your daily limit, and then you may transfer funds over for free, unlike money orders.
Australia Post can help you understand the process. Read more!