Waiting for Paypal

Thanks. Food for thought.

Many financial institutions, including mine, have been burned by fake Postal money orders and put an inordinantly long hold on them. Basically if the MO comes back as fake after presented to the counter party, which can be weeks later, you are on the hook, as is the case with personal checks, certified checks, etc.

Your first suggest, presenting to the USPS, is best, since they can verify that the MO is legit and you walk out with your cash or new MO.

I too only link paypal to credit card, and the credit line is not big.
I deposited USPS money orders at Citibank many times and they were cleared immediately. The amounts were relatively small so I don't know what happens if you deposit a few thousands.
Quick transfers from one account to another may not be a bad idea but you can be late or something elase might happen. I wouldn't count on it 100 percent.

My understanding: often, not always, there is a difference between when funds become "available" and when you are not liable for returned checks. Payee banks must return out of state checks within 4-5 days of presentation, after which your bank will ding you for non-payment. Hence, it makes sense to wait a week, even though funds may be available more quickly.

Specific to USPS money orders, they are not subject to the same regulatory law regarding returns, and hence some institutions will hold you liable for longer. Specifically:

Section 229.42 Exclusions
States that the expeditious return, notice of nonpayment, and same-day settlement requirements do not apply to a check drawn on the U.S. Treasury, to a U.S. Postal Service money order, or to a check drawn on a state or a unit of general local government that is not payable through or at a bank.