A money order is a prepaid payment instrument — you pay the face amount plus a fee upfront, and the recipient receives a paper document that functions like a guaranteed cheque. Unlike a personal cheque, a money order cannot bounce because the funds are collected at the time of purchase. In Canada, the most common issuer is Canada Post, whose money orders are recognized by virtually every bank and credit union in the country. The $7.50 fee and $999.99 maximum per instrument define both their cost and their limits.
The practical use cases for money orders have narrowed considerably since Interac e-Transfer became universal. A landlord who requires proof of payment and does not accept e-Transfer is the most common reason a Canadian renter encounters one. Beyond that, money orders serve people without bank accounts who need to make a guaranteed payment, and anyone sending payment through the mail where cash is unsafe and a personal cheque would not be accepted from a stranger. For amounts over $999.99, a bank draft is the appropriate instrument — bank drafts have no maximum and are guaranteed by the bank rather than the postal service.
Canada Post money orders carry one specific advantage worth noting: they can be cashed or verified at any Canada Post outlet across the country, giving them a distribution network that no single bank can match. Someone without a bank account can purchase a Canada Post money order with cash for $7.50 and have it accepted by a landlord who would not take a personal cheque from an unknown tenant.
Where to Buy a Money Order and What It Costs
| Issuer | Fee | Maximum per Instrument | Currency |
|---|---|---|---|
| Canada Post | $7.50 | $999.99 | CAD and USD |
| RBC | $7.50 | $999.99 | CAD |
| TD | $7.50 | $999.99 | CAD |
| CIBC | $7.50 | $999.99 | CAD |
| BMO | $7.50 | $999.99 | CAD |
| Scotiabank | $7.50 | $999.99 | CAD |
| Western Union | $5.00–$10.00 | Varies by location | CAD, USD, others |
| 7-Eleven | $2.99–$5.99 | $500 (varies) | CAD |
Canada Post and the major banks charge an identical $7.50 fee, so the choice between them usually comes down to convenience. Canada Post has the wider acceptance network for cashing, but a bank branch money order is equally valid as a payment instrument. Western Union and retail locations like 7-Eleven offer lower fees for smaller amounts but have lower recognition and sometimes lower maximums.
If you need to send more than $999.99, buy multiple money orders — $7.50 per instrument — or switch to a bank draft. Two $999.99 money orders cost $15 in fees and cover $1,999.98. A bank draft for $2,000 typically costs $7.50–$10 total. For amounts over roughly $2,000, a bank draft is cheaper and simpler.
How to Buy a Money Order
Step 1: Visit a Canada Post outlet or bank branch. Bring cash or a debit card. Many Canada Post locations accept both; banks typically require the funds be drawn from your account. Confirm before you go if cash-only is a concern.
Step 2: Request the exact amount. Tell the teller the exact dollar amount. Money orders cannot be altered once issued — the amount is printed on the instrument. If you need $850, request $850.
Step 3: Pay the face amount plus the fee. For a $850 Canada Post money order, you pay $857.50 total. Keep the receipt the teller gives you — it is your proof of purchase and your only means of tracing or cancelling the money order if it is lost or not cashed.
Step 4: Fill in the payee name immediately. Write the recipient’s full legal name in the “Pay to the Order of” field before leaving the outlet. A blank money order is as negotiable as cash — anyone can fill in their own name. Do not leave this field empty.
Step 5: Fill in your name and return address. This allows the money order to be returned or traced if undeliverable. It also provides the sender’s information the recipient may need.
Step 6: Keep the stub and send the instrument. Detach and keep the receipt stub. Mail the money order or hand it to the recipient. Never send cash in an envelope; a money order is the safe alternative for mail payments.
How to Cash a Money Order
Depositing a money order at your bank works exactly like depositing a cheque — your bank’s standard hold policy applies, which means 1–5 business days before the full amount is available. Many banks release the first $100 immediately under the federal cheque hold regulations. If you need the full amount immediately, cash it in person at the issuing outlet rather than depositing it.
| Method | Notes | Access to Funds |
|---|---|---|
| Deposit at your bank | Mobile deposit or in-branch; treated like a cheque | 1–5 business days hold |
| Cash at Canada Post outlet | Canada Post money orders only; valid government ID required | Immediate |
| Cash at issuing bank branch | For bank-issued money orders | Immediate |
| Cheque-cashing store | Any money order; fee of 3–10% of face value | Immediate |
The cheque-cashing store option costs $25–$100 on a $999.99 money order at a 3–10% fee. It is a last resort. If you regularly find yourself in a position of needing immediate access to money order proceeds, setting up a no-fee bank account eliminates the hold problem entirely — your own bank is far less likely to place a long hold on instruments deposited by an established account holder.
Money Order vs Other Payment Methods
| Feature | Money Order | Bank Draft | Certified Cheque | Interac e-Transfer |
|---|---|---|---|---|
| Maximum amount | $999.99 per instrument | Unlimited | Unlimited | $3,000–$25,000/day (varies by bank) |
| Fee | $7.50 | $7.50–$10 | $10–$25 | $0–$2 |
| Requires bank account | No — can pay with cash | Yes | Yes | Yes |
| Funds guaranteed | Yes (prepaid) | Yes (bank-backed) | Yes (certified) | Yes (cleared before sending) |
| Traceable | Yes (with receipt) | Yes | Yes | Yes |
| Cancellable | Yes (with receipt, if uncashed) | Yes (with receipt) | Difficult | Auto-deposit: no |
| Best for | Rent, small guaranteed payments, no bank account | Real estate, large deposits | Legal, official payments | Everyday person-to-person payments |
The practical distinction between a money order and a bank draft comes down to size and account requirement. Both guarantee funds to the recipient. A money order can be purchased with cash and tops out at $999.99; a bank draft requires a bank account and has no upper limit. For a $500 rent payment to a landlord who does not accept e-Transfer, a money order is the right tool. For a $50,000 real estate deposit, a bank draft is the only option in this category.
Interac e-Transfer has displaced money orders for most Canadians. It is free at most major banks, arrives within minutes, and is traceable through the banking system. The only reasons to choose a money order over e-Transfer are: the recipient specifically requires a paper instrument, the sender does not have a bank account, or the payment is being mailed to a party who does not accept electronic payments.
When to Use a Money Order
| Situation | Best Method | Reason |
|---|---|---|
| Paying rent (landlord requires guaranteed payment) | Money order or bank draft | Cannot bounce; paper proof of payment |
| Paying a private seller who will not accept e-Transfer | Money order | Safer than mailing cash |
| You do not have a bank account | Money order (cash purchase) | No account required |
| Government fee or official application | Money order or certified cheque | Often required by the receiving institution |
| Sending payment through the mail | Money order | Safer and more widely accepted than a personal cheque from a stranger |
| Amount exceeds $999.99 | Bank draft | No maximum; single instrument |
| Everyday person-to-person payment | Interac e-Transfer | Free, instant, no branch visit required |
Money Order Fraud: What to Watch For
The overpayment scam is the most common money order fraud in Canada. A buyer contacts you about an item for sale, agrees to the price, and then sends a money order for a larger amount — claiming it was a mistake or that the extra covers shipping — and asks you to return the difference by e-Transfer or wire. The money order appears to clear initially because banks sometimes release funds before a hold period completes, but it later bounces as counterfeit. You have sent real money; you recover nothing.
| Risk | What to Do |
|---|---|
| Overpayment money order from a stranger | Refuse it — never accept a money order for more than the agreed amount |
| Unexpected money order from unknown source | Verify with the issuer by phone before depositing |
| Lost or stolen money order | Report immediately to Canada Post or the issuing bank; you need the original receipt to trace |
| Counterfeit appearance | Canada Post money orders have security features including a serial number; verify at any outlet |
| Pressure to release goods before funds clear | Wait for the hold period to fully expire before releasing anything |
The safest rule for private sales: if a stranger wants to pay you by money order, offer Interac e-Transfer instead. E-Transfer funds are confirmed immediately and cannot be reversed after auto-deposit. Money orders from unknown parties carry fraud risk that e-Transfer eliminates entirely.