For the millions of consumers without a bank account, cashing a check isn’t easy. Some 7.1 million U.S. households have no checking or savings account at a bank or credit union, according to a 2019 survey from the Federal Deposit Insurance Corp.
There are ways to cash a check without a bank account, but they cost more money, often take more time and are riskier than cashing a check at a bank where you have an account.
Here are five ways to cash a check without a bank account.
1. Cash your check at the issuing bank
Banks and credit unions aren’t required to cash checks for noncustomers, but many banks will cash a check that is written by a checking account holder at that bank, even if it is payable to a noncustomer.
There must be enough money in the payer’s account to cover the check. The payee will be asked to show a government-issued photo ID, such as a driver’s license, before the bank will cash the check.
The payee also should expect to pay a percentage of the check amount, such as 1 percent, or a flat fee. That can add up over time. For example, if you get paid 52 weeks a year and it costs you $8 to cash your paycheck at a traditional bank where you don’t have an account, it adds up to $416 in check-cashing charges for the year.
There may be other hurdles, too, such as limits on check amounts and refusal of two-party personal checks. Checks that are six months old or more might be declined.
2. Cash your check at a retailer
There are a number of grocery chains and big retail stores like Walmart that offer check-cashing services.
Walmart doesn’t cash handwritten checks, but it does cash other types of checks:
- Preprinted checks
- Payroll checks
- Government checks, including tax checks
- Cashier’s checks
- Insurance settlement checks
- 401(k) disbursement checks
- Two-party personal checks up to $200
Walmart charges $4 to cash checks up to $1,000, a maximum fee of $8 for checks greater than $1,000 and a maximum fee of $6 for two-party checks.
Many grocery chains provide check-cashing services. Kroger and Publix are just a couple. Fees typically range $3-$6.
3. Load funds onto a prepaid debit card
Consumers who don’t have bank accounts sometimes use prepaid cards to deposit checks and access their cash. Prepaid cards are similar to checking account debit cards. Your spending is limited by how much money you have loaded onto the card.
Prepaid cards have different options for check cashing. Some prepaid cards let you set up direct deposit so that checks are automatically loaded onto the card. Other cards come with an app that lets you snap a picture of your check to load it onto your card. Or, you might be able to deposit your check at an ATM to load the money onto the card.
Fees are a big drawback of prepaid cards. The Walmart MoneyCard charges $2.50 to withdraw money at an ATM (not including the fee the bank charges) or a bank teller window, and 50 cents to check your card balance at an ATM. There is a monthly fee of $5.94 unless you direct deposit at least $500 a month onto the card.
Reload fees can be steep. It costs up to $5.95 to add money to a Green Dot Prepaid Visa card. Green Dot also charges $3 for an ATM withdrawal and 50 cents for an ATM balance inquiry. In addition, there is a $7.95 fee for every month there isn’t at least $1,000 loaded onto the card.
4. Cash your check at a check-cashing outlet
Check-cashing outlets are probably the most expensive places to cash checks. Some of them require customers to become “members” or to buy check-cashing ID cards before cashing your checks. In addition to a membership fee, they might charge a first-time use fee.
Check-cashers typically charge 1 percent to 4 percent of the face value of the check. Some businesses charge a flat fee on top of the percentage. The majority of checks cashed are payroll checks and government benefit checks.
The average face value of a check presented to a check-cashing outlet is $442.30, with the average fee to cash that check being $13.77, or about 3.1 percent, according to the FDIC. If that’s your paycheck and you cash it every week, you’ll pay $55.08 a month, or $661 a year, in check-cashing fees.
Not only are check-cashing stores exorbitantly expensive, there is a risk of deceptive practices. The Better Business Bureau, for example, alerts consumers to a scam where customers of a check-cashing store are called by someone who claims to represent the business. The caller offers the customer a loan and requests payment to secure the loan. Of course, the loan is never received and the customer of the check-cashing store gets scammed out of their cash.
Given the costs, check-cashing stores are best left as a last resort.
5. Sign your check over to someone you trust
Another way to cash a check without a bank account is to sign the check over to a trusted friend or relative who has a bank account and have them cash the check at their bank.
Make sure the person you are signing over your check to is willing to cash the check, and that their bank will cash it. You should accompany your trusted friend to the bank in case the teller requires your ID or has questions about the check.
Your friend must have the proper identification and be prepared to pay a check-cashing fee.
All of these check-cashing alternatives carry more personal safety and financial risks — checks and cash can be lost or stolen.
For those who can’t qualify for a standard checking account, some banks offer second-chance checking accounts. These accounts give customers the opportunity to prove they can responsibly manage a checking account so that eventually they can qualify for and enjoy the benefits of standard bank accounts.
Having a checking account at a bank or credit union is still the safest, most convenient and least expensive way to cash checks.