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What is a Certified Money Order?

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  • Written By: Amanda R. Bell
  • Edited By: R. Halprin
  • Image By: Dvortygirl
  • Last Modified Date: 29 November 2016
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A certified money order is generally a safe way to transfer money from one party to another. It is purchased at the U.S. Post Office or any number of retailers for a nominal fee in addition to the face-value amount and then given to another party in the same way as cash. Due to the fact that a certified money order is guaranteed by the issuing institution, it is more trusted by many businesses and governments for payment.

In the U.S., a certified money order purchased at the post office currently has a limit of $1,000 U.S. Dollars (USD) for domestic transfers and $700 USD for international transfers. For security purposes, there are three parts to a certified money order. The main part is the order itself, which indicates the amount it is good for and the person to whom it is payable. The second portion is a receipt stub, which includes the number of the money order that provides the purchaser with proof of payment. The U.S. Postal Service or the retailer also keeps a hard or electronic copy of the money order should any disputes arise between the payer and the payee.

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Although this kind of money order is considered one of the most difficult things to counterfeit, especially when purchased from a post office, it can also be used by financial predators. A common scheme with certified money orders is for a con artist to send one to a random person, asking that person to cash the money order at the bank and send some of the money back. Certified money orders run through a different system than checks and can take a while to bounce at a financial institution. This allows a thief to get away with the money before the bank ever realizes it was no good, leaving the victim to foot the bill.

If you receive a money order that is certified, the best way to avoid the possibility of fraud is to always cash it order at a post office; the postal service has access to the system which will immediately provide notification as to whether the money order is legitimate. While no payment is 100% guaranteed, a certified money order is perhaps one of the most economical and safe ways to send money between two parties.

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