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Best Place to Cash Checks

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Check CashingAs the national banks start instituting various account fees to make up for lost revenue, I’ve heard a lot of customers complaining about how the bailed out banks are “sticking” it to the very people who bailed them out. Those same customers are going to start voting with their wallets by moving their banking needs to local banks and credit unions, who are less likely to institute these types of fees. The more disenchanted customers are even considering going bank-less and joining the ranks of what the financial industry terms “unbanked.”

While there are additional headaches involved with being unbanked, the big one is the inability to easily cash checks. With a bank account, you simply deposit the check and go on your merry way. For the unbanked, you have to find and alternative and some of them can be expensive.

Here are a few alternative options:

Wal-Mart

Go into any Wal-Mart store with a payroll check, government check, or tax check and you can get that cashed for a small fee. How small? For checks up to and including $1,000, the fee is a maximum of $3. If your check is over $1000, the fee is $6. The maximum check they cash is $5,000 and you can do it in any checkout lane in the store.

Check Cashing Stores

A few years ago, Consumerist looked at the fees at MoneyGram. I don’t know if they’re representative of the rates at other cash checking places but they’re slightly higher than Wal-Mart and it’s unclear what checks they accept (likely the same government and payroll checks that Wal-Mart) accepts. I’d expect MoneyGram places to be cheaper than smaller check cashing operations.

CheckPoint, with locations here in Baltimore, says they cash a variety of checks other institutions don’t – including personal checks. Most of them are from reliable sources (cashier checks, insurance checks, money orders, etc.) but seeing personal checks on that list was surprising. There was no listing of fees but I’d expect them to be higher than Wal-Mart. If you have an insurance check, you might have to go to one of these operations since Wal-Mart won’t take them. (Payomatic in New York, a similar business to Checkpoint with similar acceptance lists, charges 1.86%, which is a rate set by the Superintendent of Banks).

Grocery Store

Your favorite grocery store may offer check cashing services as long as it’s a payroll check or government check but there are often restrictions. Common restrictions are limits of the check (some will only cash a small amount at first, then the amount gradually increases, etc.) and the fees will vary from store to store.

Issuing Bank

If you get a personal check from someone and you don’t have an account to deposit it in, you might have thought to go to the issuing bank, right? It turns out that those banks will most often charge a fee if you are not a customer. Not only that, but that fee will make check cashing stores look cheap! Two years ago, Consumerist reported that someone trying to cash a Bank of America check had to pay $6. This year, someone trying to cash a Citizens Bank check faced a $7 fee. It’s an option… but it’s going to be the most expensive one.

As it turns out, the worst place to cash a check is at an actual bank. Intuitively, we’d expect check cashing places to be the worst, right? Check cashing stores are often payday lenders who charge exorbitant fees but it’s the banks that often charge the most. For those who are unbanked and need a place to cash checks, the best universal option appears to be Wal-Mart because they are practically ubiquitous and their rates are quite reasonable.

(Photo: stevesnodgrass)

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7 Responses to “Best Place to Cash Checks”

  1. Shirley says:

    That surprised me. I thought the issuing bank would cash their own checks for no fee.

    Is the check cashing a standard policy at Wal-Mart?

  2. Miguel says:

    I think I have a better one:

    If you have a check, just sign it over to a friend or family member you trust so they can use their own account to cash your check. You must be present with a valid I.D. to do this because it’s considered a “third party check”. You should go to the bank with your friend or family member and ask the teller what the proper procedures are in order to do this.

    They will usually have you write: “PAY TO THE ORDER OF (Name of account holder), two signatures (The third party and the account holder) and they would cash it.

    If you have a citibank check (NOT ONE WRITTEN FROM DELAWARE), you can cash it FOR FREE. They are the only bank I know that doesn’t charge to cash checks. The check must be issued by Citibank.

    I know a lot of small business that allow you to cash your check from their accounting department. I think Safeway does this for a small fee for their employees.

    Also, employers are looking to save money by direct depositing their employees paychecks into a re-usable prepaid card. Ask if this option is available and you can withdrawal they money from a low fee atm or you can go inside a bank and cash advance the prepaid card to take out ALL YOUR CASH FOR FREE.

  3. govenar says:

    So these people are protesting being charged fees, by paying other fees?

  4. Fam4love says:

    Yes! I recently had a company automatically pull funds from my banking acct which i said no to, because of this 3 cks bounced! One to the IRS! I was very upset i called them they refunded me the money but would not pay the bounced fees. I then called the bank the cks had already been sent back…..well i did what i could and the fees?? Welp it was $93.00 i’m very upset, things like this happen all the time i would rather pay these small fees than pay the stupid huge fees

  5. Darren says:

    My recommendation to every single person on here: open a checking or savings account at a credit union. You can use your ATM card at any credit union ATM in the country for no fee. Credit unions, as I’m sure everyone knows, are not for profit. They are not link banks who are obviously out for profit. Fees at credit unions are typically far, far lower.

  6. Elisa says:

    I have always been a huge fan in having a bank account. Well, that was when I was young an d dumb! I am so tired of getting fee after fee! I live paycheck to paycheck….I can’t afford the $100 a month in BS fees!

  7. Ranger says:

    One of these days, not sure when, the public will come to the realization that despite the ease of use, banks are not your friend!
    They are the problem in this nation.
    They are completely insolvent, and rely on the Federal Reserve to remain open. For without the Federal Reserve they would collapse tomorrow.


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