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 Money orders (MO) are the simplest and most cost effective option to make payments for small amounts at any place in India. Most banks in India have a limited number of  branches, which is far less than the network of  post offices of the Indian Postal Services. To make a demand draft, you have to spend 1-2 hours at the bank and then send it  by courier. Similar an at par cheque is sent by courier at a minimum cost of  Rs 25. Also couriers have a limited number of branches.


Money Order forms can be obtained from any post office and money orders can be sent from any post office. Generally, the time taken to send a money order is less at sub post offices, since the number of  people is less. Money Orders can be sent during normal post office timings - usually 9.30 am to 2 p.m on Monday to Friday, 9.30 a.m to 12 noon on Saturday.  Post offices have central Government holidays , which differ from the bank holidays (declared by state government)  


 The cost of the  Money Order is subsidized by the government of India. The  Money Order form can be obtained  from any post office  and costs 25 paise. The sender has to fill in the amount, senders address and recipients address. There is a provision for sending a short message to the recipient  on the money order form . The Money Order charges are Rs 1 for every  Rs 20 sent. For  example for a money order of  Rs 100, the commission charged by the postal department is Rs 5. For amounts less than Rs 500, money orders are the most cost effective way to make payment. From July 2006, an additional service tax of 12.2%  has to be paid.

To ensure that the Money Orders reaches the recipient faster, a speed money order can be made. An additional stamp of Rs 5 is required for the money order. It usually reaches the recipient within a week. This facility is available only at a limited number of post offices.  All payments are made in cash.

Money Orders normally reach the recipient within one week. The time taken for delivery is less for money orders sent from Mumbai to South India (Kerala, Tamil Nadu). Money Orders sent to North India (Uttar Pradesh, Bihar) some times get misplaced, especially for large amounts. After the recipient receives the money, the sender gets a signed acknowledgement from the recipient. The acknowledgment is sent by ordinary post . If the recipient does not receive the amount within 30 days (one month), the sender can register a complaint with the post office. The post office will investigate the complaint and ensure that payment is made to the recipient.


Indian Post has launched Instant Money Order Service from January 21, 2006 , which is similar to Western Union Money Transfer. This allows for the transfer of money between 2 resident Indians through select Post Offices. The minimum amount is Rs 1000 and maximum amount is Rs 50,000 with tariff (transfer charges) between Rs 150 to Rs 330. The transfer charges seem to be very high. For amounts less than Rs 20,000, the recipient can collect payment by cash after showing proof of identity. For larger amounts, payment is by cheque. Currently (Jan 2006), this service is available in  Ahmedabad, New Delhi, Patna, Jaipur, Kolkatta, Surat, Mumbai, Hyderabad, Bangalore, Chennai. It will eventually cover all 842 head post offices in India.


International money orders (IMO) are sent through Western Union and received at any Western Union agents office. Western Union Money Transfer 


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