How to Cash a Check Banking Basics

Despite the fact paper checks are less popular today than they used to be, they are still a staple in banking. While the increased availability and encouragement to use electronic banking is heavily endorsed by financial institutions, paper checks are still a viable part of making financial transactions.

As long as paper is still around it is a good idea to understand the basics of using checks and how to cash them. This knowledge is important if you come across a scenario where direct deposit isn’t available or someone pays you in the form of a check.

If you receive a paper check, in order to access the money indicated on the check you will have to know how and where to cash the check so you can have access to the money.

If you have never cashed a check before it may be a bit confusing at first. The good news is cashing your check isn’t hard, all you need to do is understand how to endorse a check and know where you can cash it.

Here is a rundown of what you need to do to cash a check:

• Endorse the Back of the Check

If you flip the check over, you will see a designated area where you can sign your name. In ink, add your signature in this space.

When the check is made out to your name, it is advisable not to sign the check until you are ready to go cash it. This way if for some reason the check is misplaced or lost, your signature is not on it and it will be more difficult to cash.

Once you endorse a check, anyone else can sign their name and claim the amount of money written on the check. The best practice is until you are ready to actually cash the check, don’t endorse the check and keep the document in a secure place.

• Choose Where to Cash the Check

There are many options of where you can cash your check. The best option is probably the bank you do your regular banking with because you won’t have to jump through hoops in order to get your money.

When you go to your bank you may be asked to note your account on the back of the check, but with some banks all you need to do is swipe your ATM card. In most cases you have to have enough money in your account to cover the amount of the check in case the check is bad.

You can also try cashing the check at the bank the check has been drawn on. You can get this information right off the front of the check. Not all banks will do this nowadays as they are trying to decrease fraud, but with proper identification you can probably cash your check at the bank where the check is drawn from.

Check cashing facilities are another option of where you can go to cash your check. Keep in mind these places will claim either a flat fee or a percentage of the amount the check is written for. Before cashing your check, ask how much it will cost, because it may not be worth your while to pay for this convenience. Some places charge high fees, others may only be a couple of dollars.

• Other Options

If you don’t have your own bank account, have difficulty cashing the check at the bank it’s drawn from, and you don’t want to pay check cashing fees, another option is to endorse the check over to someone else. The person can either give you the cash, or go to their bank and get the cash for you. The person you choose should be someone you trust.

You can also endorse the check over to someone you owe money to. This saves you the effort in writing out a check yourself, simply endorse the check and give it to the person to whom you owe money.

Cashing a check is not a hard thing to do, but once you sign it and decide where you want to cash it, make sure you have proper identification and understand any policies the bank may have against checks which turn out to be no good. If the check bounces, you may be held responsible and have to pay bank fees.