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Do Banks Cash Money Orders?



Banks DO cash money orders.

Cashing a money order as payment for goods and services is as straightforward as cashing a personal, business, or payroll check, but like those other modes of payment, mistakes can be aggravating and delay funds availability.

Valid Form of Payment

The US government formally accepted money orders as valid forms of payment decades ago. Since that time, banks and other financial institutions must accept valid money orders for deposit or cash. Considered a form of check, money orders carry restrictions just like personal or business checks.


The Federal Deposit Insurance Corporation insures money order deposits, not differentiating between any other valid form of currency or payment deposit. However, the bank, itself, may have time-related restrictions on funds access but not for long. Banks can hold funds for several business days (not Saturdays or Sundays, and non-holidays) past the business day of deposit. (Each bank determines a business day and time restriction that centers around the time of the transaction.)

When cashing a money order, have valid, photo ID, such as a driver’s license or a state-issued official ID; some banks may require additional identification such as a credit card, a bill, a Social Security card, as well.

The bank may charge a fee for cashing a money order if the payee-the one receiving the money-does not have an account with the bank.

Cashing a Money Order: What You Need to Know

  • Note precisely how the payee’s name is spelled. Never change it if misspelled!
  • Have ID ready.
  • When at the counter, turn over the money order with endorsement area at the top.
  • Sign the payee’s name exactly as it appears on the pay-to line.
  • If the payee name is misspelled, immediately below the exact-name signature, sign the name correctly.
  • Hand the endorsed money order and proper identification to the teller.
  • If part or all of the funds are to be deposited, complete the deposit slip prior to stepping to the counter.

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