Why Do You Make a Check Payable to Cash?

You can write a check to cash as a means of expediting payment.

Writing a check to cash entails writing the word "Cash" on the "pay to the order of" line. Banks will exchange the check for cash without question. That entails significant concerns, since anyone can cash the check if they steal it or come across it if it is lost. Despite the risks, people still write out checks to cash for a number of reasons.

Flexibility

Writing a check to cash permits flexibility in who cashes it, allowing you to make a financial transaction more readily. For example, you may wish to pay a small group of people for a service, but don't know who specifically to pay. By writing the check to cash, you allow any one of them to cash it, regardless of who they are.

Ease of Use

Many establishments will treat a check written to cash just as they would dollar bills. If you find yourself short of cash or need to make a purchase quickly, offering to write a check out to cash can cut through the rigmarole of establishing credentials and determining the exact name of the institution you are paying. It also allows you to use a check in establishments that don't normally accept them.

Withdrawal

Writing a check to cash essentially lets you use the check as an ATM card at your bank. If you don't have your ATM card handy, you don't like using an ATM card, or you struggle to remember the PIN numbers for your account, you can write a check to cash and walk up to the teller's counter with it. The bank will probably ask for your identification, but otherwise will cash the check without a fuss.

Checks to Children

A child who doesn't have a bank account may present a conundrum if you wish to write him a check as a birthday gift or similar surprise. The bank may return it or refuse to accept it without a bank account to deposit it in. Writing a check out to cash solves the problem because the child's parent can cash the check against his or her own account, then ensure that the child receives the money.

Warnings

Despite the ease of writing a check to cash, many banks and anti-fraud organizations strongly recommend against it: if you lose it, or the person you intend it for loses it, then anyone will be able to cash it if they happen across it. Assume that a check written to cash is exactly the same as bills for that amount: anyone can use it and it may go to someone who you don't intend it to.

References

• Banking Questions: Problem with Check Made out to Cash