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How to Cash a Check: A Comprehensive Guide

Greg Sandler • February 21, 2024

How to cash a check using mobile deposit

In today’s increasingly digital world, checks remain a practical and convenient way to receive payments. For those used to digital payments, you might wonder: how do you cash a check?

Cashing a check is a common financial transaction. Still, navigating this task can be more complex than you might think, with different options and considerations depending on your circumstances.

This guide will unravel the mysteries of check cashing, helping you easily access your funds. Find out how to cash a check, different types of checks, methods for cashing them, and other important considerations, like fees and potential scams.

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Types of checks explained

Understanding the different types of checks is crucial for navigating the check-cashing process. The three types of checks you are most likely to encounter are personal, business, and cashier’s checks. Each type of check serves distinct purposes.

Personal checks

These checks are commonly used by individuals for day-to-day transactions. While online payments are increasingly the norm, paper checks are still used for many peer-to-peer payments, rent, utilities, and other bills. Here are some other characteristics of personal checks:

  • A check is a paper slip from your bank account that you sign and give to the payee. Some banks also let you authorize payments online and then send checks on your behalf. The person who receives the check, the payee, can then cash it or deposit it into their own bank account.
  • Personal checks are unsecured, meaning that if you don’t have enough money in your account to cover the check, it will bounce, and you may face fees. “Bouncing” means your bank did not pay the recipient because of a lack of money in your checking account.
  • Personal checks usually can be cashed at the institution whose name is printed on the front. Checks can also be cashed at many retail and check-cashing stores. Recipients can also cash a check at their own bank or deposit it into their account.

Business checks

A business check is drawn from a company’s bank account rather than a personal account.  Business checks can be used for various purposes, from payroll checks to vendor payments. The process for cashing a business check is similar to cashing a personal check, but here are some things to keep in mind:

  • If you cash a business check at the bank issuing the check, you can typically receive the full amount. But there can be limits on how large a check you can cash at a third-party location, like a retail store. There also can be fees for cashing a check at a location other than your bank or the financial institution from which the check originated.
  • In general, the full proceeds from the deposit of a personal or business check won’t be available to you until your bank has collected the funds from the source of the check. This is called a bank “hold.” In banking terms, the check has “cleared” when your bank has collected the funds from the issuing bank.¹

Cashier’s checks

Unlike personal checks, which draw on your own funds, cashier’s checks and money orders guarantee payment by the issuing bank.

  • Cashier’s checks are issued and backed by banks, while money orders are issued by both banks and third parties. This makes them ideal for transactions in which recipients need assurance they can collect the money immediately.
  • You can purchase a cashier’s check or money order with cash or funds taken directly from your bank account. A cashier’s check or money order guarantees immediate payment for the recipient. Cashier’s checks can be most suitable for transactions over $1000, while money orders are typically limited to $1000. Both can have fees, often in the range of $5 to $10 per check. ²

5 ways to cash a check

While there are many ways to cash a check, having your own checking account can be the most efficient and cost-effective method. A checking account allows you to deposit the check, providing easy access to your funds without incurring high fees. Also, there is a limit on how long you can wait to cash a check. In the U.S., banks are only required to honor checks for six months.³

Here are some of the most common places to cash a check.

  1. Banks: Simply present your check at your bank, along with valid identification, and you’ll receive your money. In most cases, you can also cash a check at a branch of the issuing bank, the bank whose name is printed on the front of the check. Most financial institutions offer this service for free, although some may charge a small fee for non-account holders.
  2. Online: If you’re wondering how to cash a check online, many banks now allow you to make mobile check deposits through their mobile app or online banking platform. Endorse your check, snap a picture of your check, follow the instructions, and the funds are deposited into your account. While convenient, keep in mind that there might be hold periods and limitations on the amount you can deposit using online banking.
  3. ATMs: If you want to know how to cash a check at an ATM, it’s important to understand what services your bank offers. For quick access to smaller amounts of money, some ATMs allow check cashing. You simply insert your check and ATM card into the machine, follow the prompts, and retrieve the cash. Keep in mind, however, that ATM check cashing can come with fees, limitations on the check amount depending on the balance in your account, and other restrictions.
  4. Retail stores: Many grocery stores, pharmacies, and other retailers offer check cashing services. This can be convenient if you don’t have a bank nearby. However, prepare to pay a flat fee or, in some cases, a percentage based on the total amount of the check.
  5. Check cashing stores: While check-cashing stores are an option, be prepared for even higher fees than at retailers – sometimes exceeding 20% of the check amount.⁴

How to cash a check without an ID

If you have ever wondered how to cash a check without an ID, you know it can be difficult. Identification is usually a universal requirement for cashing a check.

One exception is that you may be able to sign the check over to someone else, who can then cash it for you using their identification. For instance, if you endorse the check payable to a parent, that parent might be able to cash the check at their own bank, secured by the funds in their account. But, this would more likely involve them depositing the check into their own account and then withdrawing the cash for you.

Cashing a check involves trust and verification of your identity. For that reason, most banks and third-party outlets will require personal identification for check cashing. But with your own bank account, you can sign your name on the back of the check, called an endorsement, and deposit it – no identification required.

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Fees and scams to consider when cashing a check

Avoiding potential scams and fees is crucial for a secure and cost-effective check-cashing experience. In particular, you should be cautious about check cashing stores, as they may charge high fees. Unless you have no other choice, it’s best to avoid these places and cash your check at a bank.

Before you cash a check, verify that it’s legitimate. Your paycheck or government-issued checks are probably safe, but counterfeit checks are a common bank scam used to steal money from unsuspecting individuals.

Scammers can ask people to cash a check and send them the proceeds before anyone notices the check is fake. The worst part about check fraud is that if you cash a bad check, you can be on the hook for the funds.

Does it cost to cash a check?

Cashing a check at your own financial institution or the issuing bank is usually free. But if you are cashing a check without a bank account or at a retail store, there can be costs. Check cashing fees can range from a dollar to $10 per check. The exception is that check cashing and payday retail outlets often charge a percentage of the amount you receive, and that payout is sometimes treated like a loan. ⁵

Remember, convenience comes at a cost. While alternative options – like check-cashing stores – offer immediate access to cash, their hefty fees can significantly drain your funds and lead to a cycle of debt.

Knowledge is power

Navigating the check-cashing process requires an understanding of the options available to you. Having your own checking account is the best solution for writing and cashing checks – increasing convenience and eliminating or reducing fees.

Learn how to open a checking account and understand the eligibility requirements.

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¹ Information from Consumer Financial Protection Bureau, “How quickly can I get money after I deposit a check into my checking account? What is a deposit hold?” as of Jan. 29, 2024: https://www.consumerfinance.gov/ask-cfpb/how-quickly-can-i-get-money-after-i-deposit-a-check-into-my-checking-account-what-is-a-deposit-hold-en-1023/

² Information from U.S. News, "How to Cash a Check," as of Feb. 4, 2024: https://www.usnews.com/banking/articles/how-to-cash-a-check#:~:text=You%20might%20be%20charged%20a,of%20photo%20ID%20with%20you

³ Information from Cornell Law School, "Bank Not Obliged To Pay Check More Than Six Months Old," as of Feb. 4, 2024: https://www.law.cornell.edu/ucc/4/4-404

⁴ Information from Rutgers University, "Financial Organizations in the Community," as of Feb. 4, 2024: https://njaes.rutgers.edu/money/pdfs/lesson-plans/DoE-Lesson-Plan-24-Financial-Organizations-in-the-Community.pdf

⁵ Information from Information from Consumer Financial Protection Bureau, “CFPB Takes Action Against Check Cashing and Payday Lending Company for Tricking and Trapping Consumers,” as of Feb. 4, 2024: https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-check-cashing-and-payday-lending-company-tricking-and-trapping-consumers/

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