Can You Deposit a Money Order in a Bank?
Your guide to successfully depositing a money order into your bank account. Understand the process from start to available funds.
Money orders are a common and secure payment method, often used as an alternative to cash or personal checks. They are widely accepted by banks for deposit, functioning similarly to how a traditional check would be handled. Understanding certain aspects of preparation, deposit methods, and funds availability can help ensure a smooth transaction.
Preparing Your Money Order for Deposit
Proper preparation is essential before depositing a money order. Begin by endorsing the money order on the back, signing your name exactly as it appears as the payee. Adding “For Deposit Only” below your signature is advisable; this specifies its intended use and helps prevent it from being cashed by someone else if lost or stolen.
Banks typically require valid photo identification, such as a driver’s license or passport, to verify your identity, especially for larger deposits or new accounts. Always verify the money order’s authenticity. Genuine money orders feature security elements like watermarks, security threads, and specific printing patterns. For instance, USPS money orders show a Benjamin Franklin watermark and a “USPS” security thread when held to light. If suspicious (smudged ink, altered amounts, missing features), contact the issuer for verification.
Always retain the money order stub or a copy. This serves as proof of purchase and includes a tracking number to inquire about its status until funds are fully available.
How to Deposit Your Money Order
Once prepared, you have several options for depositing your money order. The most traditional method is an in-person deposit at a bank branch. Present the endorsed money order, your identification, and often a deposit slip to the teller. They will process the transaction, and you will receive a receipt.
Many banks also allow money order deposits via an Automated Teller Machine (ATM). This process involves inserting your debit card, entering your PIN, and selecting the deposit option. Feed the endorsed money order into the slot, confirm the amount, and retrieve your receipt. Confirm the ATM accepts deposits, as some are only for withdrawals.
Mobile deposit through your bank’s smartphone application is another convenient option. For mobile deposits, you may need to endorse the money order with “For Mobile Deposit Only” in addition to your signature, as per your bank’s requirements. Use the app to photograph both sides of the endorsed money order, enter the amount, and submit. Keep the physical money order until funds are fully cleared.
Understanding Funds Availability and Verification
After depositing a money order, funds availability is governed by federal regulations, primarily Regulation CC. While some funds might be available immediately or the next business day, especially for USPS money orders, others may experience holds. Banks can place holds for reasons like large deposit amounts, new accounts, or if they doubt collectability. A longer hold may apply if the deposit exceeds a threshold, such as $5,525, or if fraud is suspected.
Banks often verify money orders with the issuing institution (e.g., USPS, Western Union, MoneyGram) to confirm authenticity. This verification ensures the money order is legitimate and not counterfeit, which can take several business days. Funds are not truly “cleared” until the issuer confirms validity; even if funds appear, they may be reversed if found fraudulent. Track your deposit via online banking or mobile app to monitor when funds become fully available.