It’s a digital money world, and yet it can happen to any of us. It may not be quite as shocking a sight as a UFO or seeing Bigfoot, but it’s close: You’re staring at a paper check. And now you have to figure out how to deposit or cash this paper check, this strange artifact from another era.
OK, maybe we’re overstating things a bit, but with direct deposit being common, it is getting fairly rare to see paper checks these days. Still, grandparents sometimes like to hand over birthday money in the form of a check. You may be getting a stimulus check from the government. Perhaps a medical provider found that you overpaid, and it has sent you a refund check. Or maybe you get paper checks all the time because you don’t have a bank.
So if you’re stumped or simply would like a refresher course on how to deposit or cash a check, preferably without a hefty fee, here are some suggestions:
o to Your Local Bank or Credit Union
The Federal Deposit Insurance Corp.’s 2019 study, “How America Banks: Household Use of Banking and Financial Services,” reported that 5.4% of American households, or 7.1 million, don’t have a bank.
So if you’re what is called the unbanked, obviously going to your own bank isn’t an option. But if you do have a bank, you can cash your check through a teller, at your bank’s ATM or via the bank’s app on your phone. However, if you deposit a check at your bank, you may not receive the full amount immediately, depending on your financial institution’s policy and the amount of the check.
Usually, the first $225 of the check will be available immediately, or at least on the next business day, and then it should all be available on the second business day, according to federal rules. So if you deposit a $1,000 check on a Monday, you may have it all by Tuesday and certainly by Wednesday.
If you deposit a check for more than $5,525, you may have to wait nine business days for the full amount.
Still, if you don’t have a bank account, you really should consider getting one, says Mariah Hancock, an operations specialist and administrative assistant at Greenbelt Federal Credit Union in Greenbelt, Maryland.
“You may be eligible for an account, even if you’re on ChexSystems,” Hancock says, referring to a banking reporting agency that can be a barrier to opening an account for some people.
“A lot of institutions will open some type of limited savings account for people who have a poor banking history,” Hancock says. “So if you open one of these accounts and keep a small amount of money, typically under $100, you can be an account holder and avoid check cashing fees altogether.”
Bruce McClary, senior vice president of communications for the nonprofit National Foundation for Credit Counseling, told U.S. News earlier this year, “There are a number of programs, such as BankOn, where unbanked consumers can have access to special programs that remove barriers standing in the way of access to mainstream financial services.”
Hancock also says that some large companies offer free check cashing at banks for employees.
“Meaning that even if you have used a bank before and encountered a fee, a new employer may have an agreement with the bank to waive the fee. So I always recommend asking your employer if they have something like this,” Hancock says.
ake Your Check to a Friend or Family Member’s Bank or Credit Union
If you don’t have a bank account, you could ask a trusted friend or family member with a bank account to cash it for you. You would endorse the check with your name and the additional statement of “pay to the order of” and add your family member or friend’s name. They would then cash it or deposit it to their account.
With any luck, you’ll soon get your money and not later learn your friend or uncle has absconded with your money and is now on a Caribbean beach, sipping margaritas.
o to the Bank or Credit Union That Issued the Check to Cash It
Even if you don’t have a bank account, you can cash the check at the bank that issued the check. Take your identification, of course. In many cases, you’ll be able to receive cash without a fee – but financial institutions may impose different rules, so you can’t completely take that advice to the, um, bank.
o to Any Bank or Credit Union to Cash a Check
If you don’t belong to a bank and the bank didn’t issue the check, you will likely pay a check cashing fee, and it may be in the neighborhood of $5 or $10, an expensive neighborhood if your check is relatively small, like $100. You’d probably be better off trying out the next suggestion.
o to a Supermarket or Retail Store to Cash a Check
If you need to cash a check quickly and you’re willing to pay a fee, rather than cashing a check at your own bank or credit union or the check issuer’s bank, you can try a supermarket or other retailer.
The fees can vary, but Walmart and Kroger, for example, offer low fees. At Kroger, if you sign up for the supermarket’s shopper’s card, you can cash a check for up to $2,000 for $3 and $5.50 for anything between $2,000.01 and $5,000. The store generally can’t help you if the check is more than $5,000.
At Walmart, there is also a check cashing limit of $5,000, though from January to April, the limit is $7,500. The fee is $4 for checks up to $1,000. From $1,001 to $5,000, the fee is $8. Two-party personal checks (like a check from your uncle to you) are limited to $200, and you may pay as much as $6.
Can You Cash a Check Online?
You sure can. If you have a bank, you should be able to cash your check online for free. Your bank’s mobile app will show you how, but it generally involves taking a photo of both sides of your check and sending it to your bank through the app.
If you don’t have a bank, there are a lot of ways to cash a check online, including Walmart, which will let you cash it online for the charges above, but wherever you cash your check online, you really have to watch for fees, even with reputable and popular services like PayPal and Venmo.
For instance, with PayPal and Venmo, in each case, you can get your money in minutes, but you will pay 1% of your check if it’s a payroll or government check, and 5% for all other accepted checks – and at least $5 as a minimum payment. So if you have a $5 check, there will actually be a $5 fee to cash it.
Now, if you aren’t in a hurry for the money, you can deposit the check through PayPal or Venmo, and you will receive your money in 10 days and pay no fee.
Get a Prepaid Debit Card
And now we’re getting to your less appealing options.
You could pick up a prepaid debit card, download an app to a company like Netspend or Green Dot, and take some pictures of your check with your phone and deposit the money onto the card.
The good news: You can access your money instantly.
The bad news: These debit cards generally come with steep fees, or small fees that can add up. For instance, Netspend will allow you to deposit your money onto the card for free, but depending on the plan you choose, you’ll spend $1.50 per transaction or pay $9.95 a month to avoid the $1.50 fees.
If you need funds instantly, it may be worth getting a prepaid debit card, but make sure to carefully review the fee plans and read the fine print first.
How Long Do You Have to Cash a Check?
In most cases, you’ll have six months. Sometimes, you’ll see a “void after 90 days” printed on a check, but even in those cases, your bank will probably cash it as long as it’s within 180 days.
For Treasury checks, you have a year, and traveler’s checks don’t have an expiration date as long as the company is still in business. Money orders also don’t have expiration dates, but the issuer of the money order sometimes charges fees when those aren’t cashed for a long time, so you don’t want to hang onto a money order forever.
Stay Far Away From Payday Loan Stores
These businesses, sometimes also known as check cashing stores, will cash your check, but it’s a smarter financial move to cash a check with your bank or at a retail store, provided the fees are reasonable.
First of all, if you go to many payday lending stores’ websites, you’ll quickly notice that many of them don’t post their cash checking fees. Many of them will assure you that it’s a “small fee” that you’ll pay, and indeed, it often is. Maybe 3% of your check. But if you cash a $1,000 check, do you really want to fork over $30?
Remember, Kroger and Walmart will charge you $3 or $4.
Even 1% of a $1,000 check would be $10.