What banks will and won't accept a money order for

Most banks will not open a checking account based on a money order alone. A money order is a payment instrument—proof that you sent money somewhere—not proof that money belongs to you or that you have funds to deposit. Banks need to see either cash, a check drawn on another bank account, or a direct transfer from an existing account before they'll open a new one.

Some banks and credit unions may accept a money order as an initial deposit after the account is already open, but that's different from using it to open the account in the first place. The money order would need to be deposited into an account that already exists.

If you're trying to open an account and you have cash or a money order, the practical path is to cash the money order first, then bring the cash to the bank. This takes an extra step, but it's the one that actually works.

Key Takeaways

  • Banks require proof of funds from a bank account, cash, or direct transfer—not a money order—to open a new checking account.
  • Cashing the money order first and bringing cash to the bank is the straightforward way forward if you have a money order but no existing account.
  • Some banks have minimum opening deposits (often $25 to $100), so confirm the amount before you cash the money order.
  • Online banks and credit unions sometimes have lower or no minimum deposit requirements, which may matter if your money order is small.
  • You'll need a government ID and proof of address to open any account, regardless of how you fund the initial deposit.

Why banks don't accept money orders as opening deposits

A money order is a third-party payment. When you present it to a bank, the bank sees that someone (or some entity) promised to pay a certain amount—but they don't see that the money is actually yours or that it has cleared. Banks opening new accounts need to verify that the person sitting in front of them actually has access to funds and isn't committing fraud.

Cash and checks from other banks work because they're either when ready available (cash) or can be verified through the banking system (checks). A money order requires the bank to trust that the issuer will honor it, and most banks won't take that risk when opening a brand-new account with an unknown customer.

How to cash a money order before opening an account

You have several options for cashing a money order without a bank account. Most grocery stores, check-cashing services, and convenience stores will cash a money order for a small fee—usually $1 to $5 depending on the amount and the location. Walmart, Target, and similar retailers also offer money order cashing at their customer service desks.

The issuer of the money order may also cash it. If it's a postal money order, you can take it to any post office. If it's from Western Union or MoneyGram, you can cash it at their locations or at many retail partners. Bring your government ID and the money order itself.

Once you have cash in hand, you can walk into a bank or credit union and open a checking account. Bring your ID, proof of address (a utility bill or lease usually works), and the cash for your opening deposit.

Minimum deposit requirements and where they vary

Most traditional banks require a minimum opening deposit of $25 to $100 for a basic checking account. Some require more for premium accounts. Credit unions often have lower minimums or none at all, especially if you're a member or live in their service area.

Online banks frequently have no minimum deposit requirement at all, which can be helpful if your money order is small. However, online banks require you to fund the account through a transfer from another bank account, a debit card, or an ACH transfer—not with cash or a money order. So if you have only a money order, you'd still need to cash it and then transfer the funds electronically or set up a separate deposit method.

Before you cash the money order, call or visit the bank's website to confirm what they require. This prevents you from cashing more than you need or discovering you don't have enough after the fact.

Documents you'll need to bring

Regardless of how you fund your opening deposit, banks require two things: a government-issued ID and proof of your current address. A driver's license or passport works for ID. For proof of address, bring a recent utility bill, lease agreement, bank statement, or government mail with your name and address on it. The document usually needs to be from the last 30 to 90 days.

Some banks may ask for additional information, such as your Social Security number (which they'll use to check your banking history and fraud databases) or employment information. Have these ready, but the ID and address proof are the essentials.

Alternatives if you can't or won't cash the money order

If you want to avoid cashing the money order at a retail location, some banks will let you deposit it once your account is open. Open the account with a small cash deposit (or with no deposit at all, if the bank allows it), then deposit the money order into that new account within a few days. The money order will be held for verification—typically 5 to 10 business days—but it will eventually clear and become available.

This approach works if you have even a small amount of cash to get the account started, or if you find a bank with no minimum deposit. It avoids the fee you'd pay at a check-cashing service, though it does require you to wait for the money order to clear before you can use those funds.

What happens if you try to deposit a money order into a closed account

Some people attempt to open an account by mailing in a money order or depositing it at an ATM. Banks will reject this. They need to verify your identity in person before opening an account, and they need to see that you have a legitimate way to fund it. A money order arriving by mail or dropped into an ATM doesn't meet either requirement.

If you're trying to open an account remotely (online or by mail), you'll need to use a method the bank actually supports for remote account opening—usually a debit card, an existing bank account, or a wire transfer. Money orders don't work for remote account opening at any major bank.

Frequently Asked Questions

Can I deposit a money order into an account I'm opening online?

No. Online banks require you to fund new accounts through electronic methods: transfers from another bank account, debit card, or ACH transfer. Money orders aren't accepted for remote account opening. You'd need to cash the money order first and then transfer the cash electronically, or open the account in person at a physical bank location.

Will a bank hold a money order deposit while verifying it?

Yes. If you open an account and then deposit a money order, the bank will typically place a hold on it for 5 to 10 business days while they verify it clears. During that time, the funds won't be available for withdrawal, though the deposit will show in your account balance.

What's the fee for cashing a money order at a retail location?

Fees vary by location and amount, but typically range from $1 to $5. Grocery stores, Walmart, and check-cashing services are usually on the lower end. The issuer (post office, Western Union, MoneyGram) may cash it for free or a small fee if you go directly to them.

Can I use a money order to open a savings account instead of a checking account?

No. The same rule applies to savings accounts—banks need to see cash, a check from another bank, or a direct transfer. The type of account doesn't change the requirement. You'd still need to cash the money order first.

What if the money order is made out to someone else?

You cannot cash or deposit a money order made out to another person unless they sign it over to you and provide ID. Even then, many retailers and banks won't accept third-party money orders. If the money order is in someone else's name, they need to be the one to cash it or deposit it into their own account.