A money order is a paper document used as a form of payment, similar to a check, that is purchased by prepaying the amount printed on the face of the document. It is a more trusted method of payment than a personal check because it is a directive to pay a pre-specified amount of money from prepaid funds. Money orders are issued by third-party distributors, in direct exchange for the cash value of the money order, plus a small fee, usually less than $15. They are secure because they can only be claimed by the person or business they are addressed to. Money orders are readily accepted and converted to cash and are often used by people without access to a standard checking account.

To purchase a money order, you can go to a financial institution like a bank or credit union, the U.S. Post Office, or other places like supermarkets and convenience stores. You pay the value of the money order and any associated fees when you get it. Then, you send the money order to your intended recipient. The recipient can cash the money order by simply signing the back of it. Money orders can be used to settle debts larger than $1,000 by sending multiple money orders.

Money orders are a good option for sending money if you don’t have a bank account or don’t want to share your banking information with the recipient. They are also safer than sending cash because they dont include sensitive information about the purchaser. Money orders are capped at a certain amount, which varies by issuer, but is usually around $1,000. Money orders are a trusted financial instrument, but just because a particular business can issue a money order does not mean it is always the best payment method.