Regulations for Cashing a Check
When it comes to cashing checks, rules and regulations depend on the type of institution. Policies also vary from bank to bank and other check-cashing facilities. Some retail establishments will cash a check if you are a customer. When you are ready to cash a check, it's a good idea to check with several institutions to see which is the most cost effective.
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Identification
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You will need the proper identification when you try to cash a check. Most banking or check-cashing facilities will need some type of identification. The most widely acceptable forms have pictures such as driver's license, state identification, passport or military identification. You might be required to have two pieces of identification with some facilities and one piece with others.
Bank Relationship
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Some banks will cash a check if you have an account and you have the money in the account to cover the check. This will vary from bank to bank. Other banks will cash your check based on your relationship with the bank. If you are a longtime customer and there have not been any issues with your account, it will cash your check. It helps if you have other accounts with a bank such as a mortgage, home equity line of credit, credit card or an auto loan.
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Hold
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If you cash a check at a bank, they might place the check on hold, with the exception of $100. When you cash a check for $3,000, the bank might give you $100 and place the remaining balance of $2,900 on hold. The hold lasts for two or three days or perhaps five to 10 days. When checks are drawn on banks that are out of state, the hold time can be longer. This gives the check a sufficient amount of time to clear.
Issuing Bank
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When you have a check, which is drawn on the bank you are cashing the check at, they might cash it even though you have no checking or savings account with that particular institution. These policies vary from bank to bank. The fact that the check is drawn on that bank helps the bank verify that the check is valid and the money is available.
Check-Cashing Companies
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Check cashing companies will cash checks for customers who don't have bank accounts, but they charge a significant fee. The amount varies, but a personal check could incur a fee of 10 percent of the check amount. This fee is high because of the risk involved. A company of this sort will have the necessary verification process in place to see whether the money is available. They might also cash government and payroll checks for a smaller fee such as 3 percent to 4 percent of the check amount.
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