How to Cash a Check Without a Bank Account

Cashing a check has never been easier. In addition to traditional methods, such as visiting a bank teller, customers can now use mobile apps to deposit a check by just taking a picture.

However, not all Americans have access to a bank account.

If you fall into this camp, don’t worry. There are still lots of options for cashing your check.

The important thing to watch out for is the cost. Some check-cashing options are considerably more expensive than others.

Here’s a look at some of the options to cash a check without a bank account.

1. Check-Issuing Bank

One of the best options is to cash your check at the bank that’s backing it.

Banks are usually willing to do this because it’s easy for them to verify that the check is valid.

You can expect to be asked to open an account, of course.

And, in some cases, this can be a worthwhile choice. Many banks now offer free checking accounts. With an account, you can avoid being unbanked in the future.

However, as a non-customer, you may have to pay a fee to cash a check.

Cost to Cash Check at Top 10 Banks

Banks usually require identification for check-cashing services to combat fraud. You should be prepared with two forms of ID just in case.

2. Check-Cashing Stores

Check-cashing stores may not always carry the greatest reputation, but they do provide a service for people in need.

You can often find check-cashing services at liquor stores or from local mom-and-pop shops.

Since these types of businesses aren’t usually tied into large, national organizations or companies, they tend to charge higher fees for services.

Your typical check-cashing store will charge a percentage of the value of the check.

Others may add a flat fee on top of that percentage. Combined, fees can get expensive.

Say your check-cashing store charges a seemingly minor $5 fee, plus 2 percent of the check. In that example, cashing a $500 check would cost you $15, or 3 percent of the total face value.

Payday lenders

Some check-cashing stores also offer payday loans. A payday loan is essentially an advance of your payroll check.

Payday loans are typically due in full from a prepaid account or other easily accessible source of funds.

These types of loans are generally an option of last resort, because they charge exorbitant fees.

According to the Consumer Financial Protection Bureau, fees for payday loans are limited by state laws. However, they can often range from $10 to $30 for every $100 borrowed.

This would translate to fees of $50 to $150 for a $500 check.

Considering the loans are typically due in about 14 days, this can represent an APR of nearly 400 percent.

In a real-life scenario, you might get a $500 payday loan and then have to come up with $650 just two weeks later.

3. Retailers

If you live near a town or city, cashing a check might be as easy as running your daily errands.

Many supermarkets and retailers offer check-cashing as a service to their customers.

In many cases, this can be a cheaper option than using a check-cashing business.

Walmart, for example, charges just $3 to cash checks up to and including $1,000. The fee jumps to $6 for checks up to $5,000.

If you live near a K-Mart, you can cash a check for $1 or less. There are no fees at all for this service in Connecticut, Delaware, New Jersey, Georgia, Nevada, Pennsylvania, Puerto Rico, South Carolina, Washington or Guam.

These fees apply for personal checks up to $500 or government, payroll or tax refund checks up to $2,000.

Kroger, America’s largest grocer, charges $3 to cash government, payroll, tax refund, business or insurance checks up to $2,000. Fees rise to $5.50 for checks up to $5,000.

Retailer Checking Cashing Fees

4. Prepaid Accounts

If you don’t want to open a bank account and you expect to deposit checks on a regular basis, a prepaid account might be a good option.

A prepaid account essentially acts like a bank account. In fact, you’ll have to apply for the account just like you would with any other financial account.

This means you’ll have to provide personal and financial information to open the account.

Once the account is open, you can usually use a mobile app to deposit funds directly to the card.

With Netspend, for example, you can snap a photo of your check, follow some simple instructions and then your money will be available on your card.

Mobile services like these carry no fees.

One of the additional benefits of a prepaid account is that you can usually set up direct deposit as well.

Paychecks, government checks, and tax refunds can go directly to your card. This convenience means you can avoid having to cash your checks in the first place.

You can fund a prepaid account with other methods as well.

If you have a PayPal account, for example, you can transfer money directly to and from your prepaid account. You can also deposit cash at a physical reload center, although you may have to pay a fee.

Retailers such as 7-Eleven stores participate in reload networks, although they don’t cash checks directly for customers.

Even major banks like Chase are players in the prepaid card world.

Chase’s “Liquid” card allows you to load your card at any Chase bank or ATM. You can also use mobile deposit to upload funds.

5. Second-Chance Checking

Some consumers choose not to have checking accounts, whether out of security concerns, privacy issues or other reasons.

However, others may not be able to open standard checking accounts, perhaps due to a checkered financial history.

For these customers, so-called “second-chance” checking accounts may be an option.

A second-chance checking account is specifically designed for customers that might not have access to traditional checking.

Wells Fargo Bank offers an “Opportunity Checking” account for this specific reason. This account offers many standard checking account features and benefits, such as mobile banking, check writing, bill pay and a debit card.

The account minimum for the Opportunity Checking account is just $25. The $10 monthly service fee can be waived in a number of ways. A $1,500 minimum balance will do the trick, as will monthly direct deposits of at least $500 or 10 monthly debit card transactions.

Local banks and credit unions often offer these types of accounts as well. You may have to be a local resident to be able to use their services.

Second chance checking account fees compared

6. Sign the Check Over to Someone Else

If you know someone you can completely trust, you can use them as a type of third-party check-cashing service.

On the back of your check, write “pay to the order of {name}.” Insert the actual name of the person you’re signing the money over to. Sign below this instruction.

Now, the person you signed the check over to can take it to their bank and cash it.

Before you take this step, confirm with the bank you intend to use that they accept so-called “third-party” checks.

Some banks don’t, because they have no way of verifying who you are, especially if you aren’t a bank customer.

Be advised that in this instance, you are essentially giving the amount of the check to another person, and they become the legal owners.

If they are not trustworthy, it is completely within their rights to simply pocket your money and not pay you anything.

Conclusion

If you find yourself without a bank account, rest assured there are still plenty of ways that you can cash a check.

From your local mom-and-pop shop to national grocery stores and retailers, you can find lots of ways to get your money.

As with any financial transaction, shop around to get the best prices before you commit to anything.

Be particularly wary of payday lenders, or any others that charge high rates of interest.

In most cases, getting a bank account is the best answer, particularly if you will be receiving a series of checks. These days, most financial institutions offer free or low-fee accounts that can provide at least basic checking and account services.

Barring that, opening a prepaid account might be a good option.

Whatever you choose, remember that you aren’t ever restricted to just one choice. The next time you need to cash a check, run your comparisons again to find the best option for your needs.