For many Americans, cashing a check is easy and free. Simply walk into a branch or upload a picture of the check, and your bank will deposit it into your account. But if you’re one of the 67 million U.S. adults who doesn’t have a bank account or regularly use one, the task can be harder and more expensive.
Without a bank account, you will have to pay to cash your check. (There are only rare occasions where this isn’t the case.) Check-cashing fees vary widely and, depending on the size and type of check, you could spend as little as a buck or as much as $100.
The requirement to pay for cashing a check is “very meaningful to anyone living paycheck to paycheck,” says Michael Moebs, founder and CEO of Moebs Services, an economic research firm. Here’s how to find the best deal to cash your check—of any kind. No matter where you go, you will need to present a valid identity, possibly two, to complete the transaction.
Best Bet: Kmart, Walmart or Grocery Store
Kmart: This discount retailer offers the lowest check-cashing fees around. In general, the store charges $1 to cash a payroll, government, tax, or two-party personal check—a rarity, given that personal checks are the riskiest type. In Illinois and Rhode Island, Kmart charges only 50 cents to cash a check. And it’s free in eight states—Connecticut, Delaware, Georgia, New Jersey, Nevada, Pennsylvania, South Carolina and Washington—along with Guam and Puerto Rico.
Walmart: The world’s largest retailer has been the most dominant player in check-cashing for the past decade, says Moebs, largely because of its competitive pricing and expansive footprint. “They do [check-cashing] primarily because they want you to get in the store and buy stuff,” Moebs says.
Walmart prices max out at $3 on checks up to $1,000, but can be as low as $1 in some markets. The store charges $6 for checks that are over that amount, up to $5,000. The store accepts payroll, government, tax, insurance settlement, retirement disbursement and cashier's checks. But it doesn’t cash personal checks.
Grocery stores: Provided you have a shopper card, Kroger and many of its affiliates charge $3 for checks up to $2,000 and $5.50 for those that are over that up to $5,000. Fees at H-E-B Grocer start at $3 and vary by location. Neither Kroger nor H-E-B cash personal checks, but they do cash payroll, government and insurance checks. Other regional or local grocery stores may also provide check-cashing. Visit their customer service to find out.
Hit or Miss: Banks
It’s difficult to impossible to cash government checks at the major banks unless you’re a customer there. (Community banks and credit unions may be more welcoming). Many of the major banks will, however,cash checks—including personal ones—if the check comes from that bank itself, even if you’re not a customer. Generally, checks have the issuing bank’s logo printed on them, so you can determine which bank to try.
While bank check-cashing fees typically range between $7 and $8, PNC is the standout by charging no fee on checks that originated from its account-holder. In other cases, a bank may waive a fee if you open a checking or savings account. Even with the fees, you’re getting a decent deal cashing personal checks at a bank—if you can’t get to a Kmart—than relying on check cashers. Community banks and credit unions may also offer competitive check-cashing rates.
Rarely Use: Check Cashers
The biggest fees--and therefore the worst deals-- are generally found at check-cashing outlets that dot urban streets or strip centers or are part of larger outfits offering services like payday loans and money orders. Fees at check-cashers are regulated by state law—if they exist—and vary depending on the state and type of check.
For instance, check-cashers in Delaware can charge 2% of a check’s value or $4, whichever is greater, for all checks, even a personal check. But in California, a check-casher can charge up to 12% of the value of a personal check. There are also many states that have no regulations, so check cashers can charge whatever they like.
Consider: Other Options
If you don’t need cash, but simply access to your check’s funds, consider a prepaid debit card account. There are still fees you must pay--monthly service fees, check-deposit fees and cash reload fees among others—but you can typically direct-deposit payroll and government benefits checks on the card (again, for a fee) and access the funds almost immediately. Other cards come with the ability to load any check onto the card within minutes by taking a picture of the check, again for a fee.
Fifth Third Bank also offers its Express Banking account that lets account holders immediately access check deposits—sometimes for free if the customer averages 16 transactions a month. For low-transaction customers, immediate access to a deposited check is 4% on personal checks; 2% on payroll, government and other official checks; and 1% on Fifth Third checks. The account has no minimum balance requirements, charges no monthly service or overdraft fees, and comes with an optional debit card.