Cashing a check may be a difficult process for millions of people who do not have a bank account. According to a study conducted by the Federal Deposit Insurance Corporation in 2019, around 7.1 million households in the United States do not have a checking or savings account with a bank or credit union.
There are ways to cash a check even if you do not have a bank account, but doing so will cost you more money, take much more time, and expose you to more danger than if you were to cash the check at a bank where you already have an account. Here are several alternatives to using a bank account when cashing a check.
Cash Check At Issuing Bank
Credit unions and banks are not legally obligated to cash checks made by account holders for individuals who are not their customers. Nonetheless, many such institutions will cash a check written by an account holder, provided the account holder has a checking account with the financial institution in question.
The payer's bank account must have sufficient funds to cash the check. Before the bank can cash the check, the payee must provide a picture identification card issued by the government, such as a driver's license.
Moreover, the payee should be prepared to pay either a flat charge or a percentage of the check's total amount, such as 1 percent. Over time, it may become significant. For instance, if you are paid once every week throughout the year, and it costs you $8 to cash your paycheck at a regular bank where you don't have an account, the total amount of money you will spend on check cashing fees during the year would be $416.
There might also be further obstacles, such as a limit on the amount that can be written on a check or a reluctance to accept two-party personal checks. There is a possibility that older than six months' checks may be rejected.
Cash Your Check At A Retailer
Check to cash is available in various grocery store chains and large retail businesses, including Walmart, among other places. Checks written by hand are not accepted for cashing at Walmart; nevertheless, the following forms of checks are accepted:
- Preprinted checks
- Cashier's checks
- Payroll checks
- 401(k) disbursement checks
- Insurance settlement checks
- Government checks
Check to cash at Walmart costs $4 for amounts up to $1,000, up to $8 for amounts above $1,000, and up to $6 for two-party checks. The highest price for cashing a two-party check is $6. Checks may be cashed at several different grocery store companies. Kroger and Publix are just a couple. The fees vary from $3 to $6 on average.
Load Funds Onto A Prepaid Debit Card
Prepaid cards are a convenient alternative for consumers who do not have bank accounts to use when depositing checks and accessing cash. Debit cards from checking accounts are comparable to what is known as prepaid cards. The amount of money you have placed on the card limits how much you may spend.
Check cashing services may be obtained in various forms using prepaid cards. You may load checks onto some prepaid cards by setting up direct deposit, which allows you to avoid carrying around paper checks. Some cards come with an accompanying app that lets you take a photo of your check and save it to the card electronically. Instead, you may be able to load the money onto the card by depositing the check at an automated teller machine (ATM).
Fees are a significant disadvantage of using prepaid cards. The Walmart MoneyCard costs $2.50 to withdraw money from an automated teller machine (ATM) or a bank teller window (this does not include the price that the bank charges), and the fee to check your card balance at an ATM is $0.50. Unless you make a direct deposit of at least $500 per month into the card, you will be charged a monthly fee of $5.94.
Sign Your Check Over to Someone You Trust
Another option to cash a check, even if you do not have a bank account, is to give the check to a trustworthy friend or family who has a bank account and then has that person cash the check at their bank. You need to be sure that the person you are handing your check to is willing to cash it and that their bank will cash it before you hand it over to them. You should go to the bank with someone you can rely on as a companion if the teller needs to see your identification or has concerns about the check. Your acquaintance must provide valid identification and be prepared to pay a charge to cash a check.
