Bank & Credit Union Money Order Sensitivity

Money Order Sensitivity: To start of this post, I will explain what a money order is. A money order is a certificate that is usually issued by banking institutions or the government, in which allows the payee (a person to whom money is paid or is to be paid, especially the person to whom a check is made payable) to receive money/cash on the spot. The money order functions just like a check, where the person who purchased the money order has the option to stop payment. Money orders can be, without hesitation, be accepted and converted into cash (often used by people without access to a standard checking account). This method is an acceptable form of payment for small debt and can be purchased for a small service fee in most institutions.

In this post, we’ll provide you with a list of money orders deposits that were successful, successful to a certain extend, unsuccessful to point of account shutdown, etc. Keep in mind that depositing money orders immediately after opening an account is/can be a risky move – it could result in the following:

• Wasted time
• No sign-up bonus
• The need to float/slow deposited funds for a period of time
• Could potentially black mark on shared bank systems

Regardless of the money order sensitivity of the banks/credit unions, at a certain level of money order (MO) volume financial institutions will definitely take notice. But meanwhile, most financial institutions will not find an issue with smaller, low volume levels of money orders. The reason why people will use this method is for manufactured spending to meet credit card/bank/etc bonuses. For example, you’re being offered $150 when yo spend $500. One could go purchase a money order (for a small fee) for $500 and it would count as a purchase – then receive the bonus and re-deposit the money order back into their checking account. However, this method can be seen as money laundering – meaning the process of disguising the proceeds of crime and integrating it into the legitimate financial system.

Money orders can also be used/seen to structure money (in other words, smurfing) which is the act of breaking up financial transactions to get around the federal reporting requirements that kick in for transactions over a specific amount of money. For example, you can get reported for depositing $10K all at once. But some may deposit it in increments, such as $1K this week, $2K the next, $3K the next two weeks, etc. This is structuring.

Money Order Sensitivity Tips & Advice

Below is some of the best ways and practices when conducting money order deposits:

• Do Not Use a Bank That You Use For Multiple Reasons
  • Primarily for the simple reason that you do not want to terminate a good relationship with your bank. If this institution is one that you use for your primary checking account, this could result in you not being able to re-establish auto-payments (which could make you end up missing payments), negate you from credit card bonuses, bank bonuses, credit card rewards, and many other benefits. This could actually result in you having your checking account terminated.
• Use A Local Bank or Small Credit Union
  • This is recommended due to some of these reasons:
    • How close a bank is to a customer’s house/business is a potential risk factor
    • Could be beneficial to open the account in-branch (in-person)
    • Assuming you may not/don’t live in one of those areas
    • A small/local credit union may fall into the lower column on the quantity of risk matrix
    • Could have different technology/reporting methods than institutions that are much larger
    • Reduced differences though independent testing/auditing
    • Could have more local decision makers vs. full algorithm/rule based
• Business Account
  • The computer’s algorithms could expect more money order volume when deposited to a business account
• Age/Season the Account
  • You could open an account, leave it open for some time, and establish a relationship prior to depositing money orders (establish a relationship). If you’re asking how long, the longer, the better (shoot for a few months), but definitely start small on the MOs, then move up from there.
• Float/Velocity Rule
  • Start slow on how quick you move funds through the account – this could be very beneficial.
  • If your account gets/is closed,  you may not need to float the funds deposited for a period of time.
  • In addition, simply maintaining a certain deposit balance could be in your favor.
• Telling the Branch Manager?
  • If you’re being honest, you can tell the branch manager that you’re using this method to redeem bonuses, miles, points etc. Even then, this method will inhibit scrutiny on the account moving forward. This may also impact decisions made by the back office and the department of risk management.

Notes: Below you will see a table of the following data points our readers and a variety of sources we have gathered across the web. Please take note of the following symbols and their meanings below to be able to read the table:

• + This means positive – there is no penalty/negative action/etc when reported
• –  This means negative – there was a warning or even an account termination/shut down
• ?  This means unknown/data points such as volume may be unknown as well
• ~  This means it’s positive BUT at a lower volume – transcribed as less than $2-3K/month.

Disclaimer: The following data points listed below may be incorrect as information changes over time- the list may be correct at the time it was posted, but may change and be outdated. The data points listed are gathered from many sources whether it be from our readers or across the web.