When you don’t have a bank account, cashing checks can be a bit of a problem. Even for their customers with bank accounts, most banks require a holding period of up to three days before the check can be drawn against. This protects the bank from losing money on fraudulent or stolen checks, checks drawn on an overdrawn account, or a closed account.
If you don’t have a bank account, the options for cashing those checks are pretty limited. Here’s three ways in which you can cash those checks easily.
1. Check Cashing Franchises.
Check cashing stores are in the business of cashing checks for people without bank accounts. These stores will cash all types of checks including personal checks, tax refunds, student loan checks, business checks and more. The fee for cashing these checks ranges from 2-9% of the total transaction. For an example, to cash a $1000 check at one of these places, you will pay a fee of $20-$90 for the service. Check cashing businesses will need to see some type of picture ID; be prepared to bring along a driver’s license.
2. The issuing bank.
Cheaper than using a check cashing franchise is to cash the check at the issuing bank, that is, the bank on which the money is drawn. The issuing bank can tell within minutes if there are enough funds in the account to cover the check, and can usually cash the check on the spot. Non-account holders will be charged a fee; the last time I cashed a check, the fee was $5. Banks will also ask for picture ID so be prepared to show them a driver’s license.
3. Endorse the check to a trusted relative for cash.
If you aren’t in a hurry for the cash, the free way of cashing a check is to endorse it over to a trusted relative. He can deposit the check in his own bank account, and once the three day holding period has cashed can draw out the funds. For small amounts and checks that are pretty much guaranteed to clear, your relative might be willing to waive the three day period and give you the cash on the spot.
Cashing a check without a bank account of your own may be difficult to do, but certainly isn’t impossible. These three options will get the cash in your hands with minimal fuss.