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How to Cash a Check Without a Bank Account

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Bank Vault DoorWhen I first started working, I had just moved from Pittsburgh to Baltimore and was without a local bank. I had a bank account, it was just for a local Pittsburgh bank (and a credit union back home in New York) and so when I learned that my first check was going to be paper, I needed a solution.

For me, the simplest solution presented itself in the cafeteria of my new workplace – my company, Northrop Grumman, had it’s own credit union and so I opened an account there. Nowadays, if you have an online savings account with the likes of Ally Bank or ING Direct (now CapitalOne360), you can deposit the check with your phone (assuming it’s not over $3,000). Back then, you actually had to find an ATM or a teller!

So what if you don’t have a bank account or you can’t or don’t want to open a new bank account? We have some options.

The Issuing Bank

Banks will almost always cash their own checks so look for the issuer, usually identified somewhere on the check, and find a local branch where you can cash it. Some banks will charge you a fee to cash a check if you don’t have an account there, it’s in part to persuade you to open an account and also to cover the costs of doing so (time of the teller, use of the cash, etc.). TD Bank made news last year when they imposed a $5 check cashing fee for non-customers but they’re hardly alone, many banks charge anywhere from $5-$10 and some charge a percentage of the check itself.

Wal-Mart

Lots of people hate Wal-Mart but if you have a check and want to cash it, they offer a great low cost option if your check is under $7500. For checks up to and including $1000, there is a maximum $3 fee and for those up to and including $7500, there’s a $6 fee. That’s it. You can get cash or a Walmart MoneyCard, though I can’t imagine why cash isn’t the best option here.

There are limits, you can’t cash personal checks at Wal-Mart. They accept payroll checks, government checks, tax checks, and any Walmart issued MoneyGram money orders.

Check Cashing Store

Check cashing places have a terrible reputation but they’re not always awful, especially in states with increased regulation. The types of checks they’ll accept will be broader though, as many will take checks from unions, lawyers, small businesses, insurance settlements, and the like. They’re more “official” than personal checks but just barely. What are the fees like? That depends on the state because many states limit those rates (in the same way that Wal-Mart fees are state dependent too). For example, in New York, the check cashing rate is 1.91%. It’s not a lot but if you have to do this more than once than paying an 1.91% “tax” can be brutal.

Prepaid Cards

Some banks offer prepaid accounts, tied to prepaid cards, that let you deposit checks at their ATMs for free. The downside is that prepaid accounts, or secured credit cards (they’re not the same, they’re similar but not the same), are often fee heavy with, at a minimum, monthly maintenance or account fees. You’re basically using a bank branded gift card.

Ask a Friend

If you want to avoid fees and you have a friend (that you trust) with a bank account, ask them to deposit it on your behalf. To be 100% safe, they’ll probably want to make sure the check clears so this is something that could take some time, even with Check21, but hopefully your friend won’t charge you any fees!

Lastly, there may be an even lower cost, faster local option available to you if you ask around.

(Photo Credit: gsz)

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8 Responses to “How to Cash a Check Without a Bank Account”

  1. Daniel says:

    I have gone to the issuing bank before, with a personal check. And, Wal-Mart is a good option for a reasonable fee.

    And, I know it’s not “without a bank account,” but today you can also deposit a check into an Internet bank account with a smartphone. I have an ING Direct…er… Capital One 360 … account, and I never go anywhere to deposit checks anymore, I just use the app and deposit it via my iPhone.

  2. Steph says:

    My friend has had problems cashing checks at a particular bank in our area when they are the issuing bank. Being a lawyer and having lawyer friends that deal with this sort of thing, he’s in the middle of a lawsuit over the charges. We think that the teller(s) are pocketing the fee since it’s the bank’s policy NOT to charge a fee when cashing such checks.

    So, to make a long story short, be sure to check out the bank’s policies on check cashing before you show up so you’re not caught blind sided.

  3. I would avoid the ask a friend suggestion as I can see this causing some issues if something were to happen with a check

  4. Amy L. says:

    And there’s always the local liquor store. The ones around here charge a percentage of the check’s value. It’s usually 1-2%. Thanks for those other options.

    I do get a paper check once a week for a paper route. The thing about Wal-Mart and some other grocery stores is that they have to be able to scan the check. If the check doesn’t scan, they can’t cash it. It’s for protection against counterfeit checks, I’m sure. My check never scans!

  5. Emilio P says:

    Banks have to report transactions to IRS; I believe if the check is over 10.000.
    Or even if your friends gets audited; it will be hard for them to explain why they cashed a check for someone else.

    Am I being too paranoid?

    • Jim says:

      Not for checks, there are two reasons a bank will file a report. The first is if you deposit cash and it’s based on the size, $10,000. The next one is based on suspicious activity and that bar is $5,000. There is nothing for checks.

  6. susan f says:

    I just went to td bank today to cash a 60.00 check. They wanted 7.00 to cash it. Teller said it was their policy.


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