Reasons to Open a Bank Account
Opening a bank account will make it easier to cash your paychecks, and it’s not expensive to start. You can open a bank account quickly and easily, and in most cases, you can do it online.
Low Fees
You can even get a checking account with no checks. For example, Key Bank offers a “Hassle-Free Checking Account” with a minimum deposit of $10 and no monthly fees. After the first 30 days as an account holder, you can deposit a check and access your funds after waiting just one day. If you have an equal balance in your account, you can cash the check immediately. Key Bank can issue you a debit card linked to the account which is accepted almost everywhere, acts like cash, and will be insured against loss.
Moreover, many banks, like Key Bank, offer accounts without monthly maintenance fees as long as you keep the account open for a specified period.
Direct Deposit
A bank account will allow you to choose for direct deposit from your employer or government entities such as the Internal Revenue Service and Social Security. You can then spend the money using your debit card without the hassle of visiting the bank or check-cashing institution.
Easy Access to Funds in the Account
Most banks now allow remote check deposits online and then utilize those funds via debit card. Another feature of a bank account is gaining access to services like Venmo, which allows you to receive money from other parties and transfer it to your bank account or linked debit card. If you transfer from Venmo to your debit card, you should be able to access the funds within one hour.
What You Need to Cash a Check
To cash a check, you usually need to provide one or two forms of identification, including a photo ID, such as a driver’s license, passport, or personal identification card. A government-issued photo ID is the best and most widely accepted form of identification for this purpose.
Where to Cash a Paycheck
The following options are worth considering if you decide that a bank account is not suitable given your circumstances.
Employer’s Bank
You may be able to cash the check at the bank that your employer used to issue the check. If there is a local branch, stop by and ask if they will provide this service. You can also check with your employer to see if arrangements have been made with the bank that issues their checks to provide this service or a low-cost option.
According to a survey conducted by My BankTracker, Citibank does not charge a fee to cash a check of less than $5000 drawn on its bank, and Capital One will also cash a check drawn on its bank for free. Many banks charge fees, typically ranging from $6 to $10, although some banks may charge higher fees based on a percentage of the check’s value.
Some banks will cash checks that are not drawn on them for non-customers. The fees for this service are generally higher. For instance, Bank of America charges $8 per check, with a maximum fee of $22.50.
Check Cashing Machines
Check cashing machines can be found in many retail stores and convenience stores. Some provide check-cashing services around the clock, while others are only open when customer service centers are open. Options to receive cash payment or payment on a gift card are available at some larger stores. The downside of this option is the fee structure, which typically ranges from 1% to 5%. For example, 7-Eleven charges 0.99% of the check’s value at its check cashing machine.
Services
Cashing Checks at Retail Stores
Check-cashing services for payroll checks, government checks, tax checks, and money orders are available at many Walmart stores for a small fee – $4 for checks up to $1,000 and $8 for checks over $1,000, with a maximum check amount of $5,000. Walmart will also cash a personal check up to $200 for a fee of $6. KMart will cash payroll checks, government checks, and personal checks (up to $500) for $1 at most participating locations.
Some retailers, especially grocery stores and some liquor stores, often cash checks. In the case of grocery stores, you may need a store membership card to access check-cashing privileges. In many cases, there are fees associated with these services. Check with the customer service department to find out what services are offered.
Prepaid Bank Cards
Some financial institutions offer prepaid cards that you can obtain without needing to open a bank account. In some instances, you can load cash and checks onto your card at an ATM or through an app on your phone. You can then use your card to withdraw money or make purchases. Please note that a monthly fee will apply for these services.
Check-Cashing Stores
An expensive option for cashing checks is a check-cashing store. Check-cashing stores typically charge a percentage of the check’s value along with a flat fee. Some may charge a fee that equals a percentage of the check amount. Others may charge a flat fee in addition to a percentage fee. For example, to cash a $2,000 check, there would be a $5 fee plus 1%, resulting in a $25 deduction from your paycheck.
Check-cashing stores often offer advance payments on checks not yet cashed for a significant fee and will take the individual’s paycheck on the date it is delivered. These emergency loans are the most expensive option, and once recipients become accustomed to a schedule for early payments, they are likely to continue using this service at a high cost. According to the Consumer Federation of America, emergency loans can cost $15 to $30 to borrow $100, with interest rates reaching up to 400% over the course of a year.
Asking for Help from Friends and Family
Some people without bank accounts reach out to trusted contacts who do have bank accounts and ask them to cash checks on their behalf.
Note
The information contained in this article is not legal or financial advice and does not replace such advice. State and federal laws frequently change and may not reflect your state’s laws or the latest changes in the law.
Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts in our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and high quality.
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Source: https://www.thebalancemoney.com/how-to-cash-a-paycheck-without-a-bank-account-2062771
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