In essence, money orders are like prepaid checks. They can't bounce. And they are good to use when you want to keep personal information safe and private. In Canada, you can get Canada Post money orders that use security codes, polarized ink and barcode serial numbers. They can only be cashed in Canada.
Cash a Canadian Money Order
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According to officials at the Canada Post (which functions as Canada's primary postal operator), you can cash any money orders issued in the country at any Canadian post office. They can also be deposited or cashed at a bank, but while it is free to cash them at post offices, there may be charges from the financial institutions. If the money order is payable to a business or another kind of organization, the money order can only be cashed by their bank.
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To cash a Canadian money order, you must be the payee with your name shown on the "pay to" part of the money order. Unused money orders can also be cashed by senders at post offices. Of course, proper identification (government-issued ID) will be required. Keep in mind that post offices do not keep as much available funds on hand as financial institutions do, so if the money order is large, it makes more sense to head to a bank.
More About Canadian Money Orders
It only costs $7.50 to buy a Canada Post money order, but the maximum amount per money order is CAN $999.99. You can purchase more than one, but you can only pay for them with cash or debit cards; credit cards are not accepted for payment. So if you want to purchase a $100 money order, be ready to pay $100 and the $7.50 fee. Do not lose the receipt because it has important information you may need later.
If you need a refund or want to track an uncashed money order that you purchased, get the receipt and call Canada Post at 1-800-563-0444. They will need the serial number from the money order. Remember, only the sender can ask for a refund. It is also wise to have a government-issued ID on hand when conducting all Canada Post money order transactions, from purchasing to cashing to status to refunds.
Understand How Money Orders Work
The editors at Loans Canada explain that money orders are made out to specific payees, for a set amount of currency. Unlike checks, the funds are guaranteed and cannot "bounce." When purchasing a money order, you have to complete a form and provide the full amount of money as well as the fee. The money order will be made out to a specific payee. You can track your money orders with tracking numbers, and once again, remember to keep the receipt.
If a money order you receive was purchased from a bank, it may be easiest to go to one of the branches to cash it. You can always take it to a post office if you prefer, but remember the post office keeps less cash on hand than a bank. There are other places to cash money orders, like credit unions and check-cashing spots. Always call first to see if any fees will be incurred, though.