Cashing cheques is not the same as banking. They are companies that offer financial assistance. They offer cheque cashing, money orders, electronic bill payments, and small installment loans. Some of these businesses also offer payday loans or advances on paychecks. People who can't get a regular bank account or who need cash in just a few minutes can use a cheque-cashing service to get their paycheck money. But cheque-cashing services can be expensive and have maximum charges permitted. Before you use a service to cash a cheque, you should know the convenient locations, registered trademarks, and other qualification requirements.
What is cheque cashing?
Canada has one of the best systems for clearing cheques in the world. Even though cheques are being used less and less because electronic and card payments are becoming more popular, financial institutions in Canada still clear nearly a billion cheques every year. Cheque-cashing services let you get your money even if you don't have a bank account. For a fee, these services allow you to cash your paycheck and other types of cheques.
Pros and cons of cheque cashing service
One's circumstances and financial situation influence the decision to employ a cheque-cashing service. While there are fees, having faster access to your money might be beneficial. This method has both advantages and disadvantages. It is prudent to comprehend both.
Pros of cheque cashing
Instant access to cash without having to wait after the cheque clears;
Financial business for the unbanked and under-banked, who would otherwise have nowhere to turn;
The services may also have offices where there are no traditional banks;
The services may be open the next business day, giving you more chances to cash a cheque.
Cons of cheque cashing
Cheque cashing services charge fees, which is one of the worst things about them. These fees keep low-income people in a brutal cycle where they have to use some of the little money they make to service just for cheque-cashing.
The total cost can be very high;
It's risky to carry money;
Some cheque-cashing services may try to sell high-cost loans with high-interest rates;
There is no insurance for your money.
What types of cheques can be cashed?
Cashier's cheque and certified cheque
The person getting the check signs certified checks while the bank signs the cashier's checks. Both cashier's checks and certified checks are official bank checks. Both are easy to get and not too expensive. They are also thought to be safer and less likely to be used for fraud than personal checks.
Counter-signed cheques
Counter-signed cheques can be cashed by someone other than the person indicated on the front. To prevent this, write "for deposit only to payee's account" on your cheque. Only the person or merchant whose name is on the cheque can deposit it. Check with your bank to see if they accept checks that two people have signed. Not all banks will take them, though.
Stale-dated cheques
A cheque with a "stale" date is old, but not necessarily bad. These items may still be honored by financial institutions, but they are not required to do so. Financial institutions consider a cheque outdated after six months unless it's a certified or government cheque. Keep track of cashed cheques. It ensures you have the money to cover a stale-dated cheque.
Post-dated cheques
A cheque with a date in the future is called a "post-dated cheque" or "post-dated cheque." In other words, they wrote the date after the date on the cheque. Even though the cheque has a date in the future, you could pay it from the bank account before that date. It is possible to deposit a check on a future date before the date that is indicated on the check. However, doing so is not recommended. Be ready for the possibility that there won't be enough money in the checking account to cover the check.
Holds on cheques
Banks may place a hold on money deposited via cheque to manage the risk of loss if there are insufficient funds in the cheque-account writer to cover the cheque. This hold also protects you because you will not be spending funds from a cheque that it may reverse because of inadequate funds on the cheque-writer. When an account is opened, banks must provide their hold policies in writing. Most cheques in a Canadian dollar account have a maximum hold time of four working days, and banks must make $100 available within one day.
If your financial institution is currently putting a hold on your cheques, inquire about your choices. Instead of receiving a paper cheque as payment from your employer, ask if they can deposit the funds directly into your account via direct deposit or ask them to send you an e-mail money transfer. This way, you will have immediate access to all the money.
Dishonored cheques
Dishonored cheques are assets deposited at a depository account but returned to the State because of insufficient finances or other factors that prevented the bank from cashing the items. A dishonored cheque has been handed to a bank for deposit or money, but they refuse to accept or honor it. A cheque can be returned for several reasons. Depository banks make two attempts to deposit cheques before they are considered dishonored.
When a cheque is dishonored and either cannot be re-deposited or has been re-deposited and dishonored a second time, the depository bank will notify each department. Upon receipt of such information, the department will draw a cheque on the account it placed the deposit to purchase the dishonored cheque within ten (10) business days. The buy-back cheques issued to be payable in the depository bank are used to clear all bank records affected by the dishonored cheque return.
Where you cash a cheque
Cash-loading retailer
You can deposit a cheque, add it to the card's balance, and withdraw cash with prepaid debit cards. To do so, deposit the cheque by mobile cheque deposit through the card's mobile app, if available, or by visiting a big shop that is part of a reload network, such as 7-Eleven or Walmart. Then, withdraw cash at that retailer's location or an ATM. There could be two fees in total: one to load the cheque onto the card and another to withdraw cash. Prepaid cards typically cost around $5, with a monthly service fee of roughly $5.
Payday lending establishment
Payday loan stores are a costly choice because they often charge a percentage of the amount of the cheque you're cashing. You're better off using a bank, prepaid debit card, or retail outlet. With Ontario residents, the maximum allowable cost of borrowing under the Payday Loan Law is $15 for every $100 advance. The cost of borrowing on a $300.00 loan for 14 days is $57, with a total payback amount of $357. It is available to Ontario and British Columbia residents. With Nova Scotia residents, the highest allowable cost of borrowing under the Payday loan agreements is $19 for every $100 advanced.
The bank or credit union on the cheque
A cheque should be cashable at the financial institution of the person or corporation who wrote it. However, banks and credit unions are not compelled to cash cheques from noncustomers. If they do, they frequently impose a fee, which can be a fixed amount (such as $8) or a percentage of the cheque (such as 1 percent). Some banks may also need two kinds of identification.
Major retailers and supermarkets
Cheque-cashing services are available at many large retail chains, usually for less than $10 per cheque. For example, Walmart charges $4 to cash cheques up to $1,000 and $8 to pay cheques larger than $1,000. Kmart offers a lower-cost service of cashing cheques up to a specified amount for $1 or less.
How to cash a cheque
How quickly you can get your money can depend on whether you cash or deposit a cheque. When you cash a cheque, you get cash in your hand. You get the full payment, which you can spend right away. But it's not always simple or free. When you deposit a cheque, you put the money from it into your bank or credit union account. You won't have to worry about losing the money because you'll put it somewhere safe. The bank might let you take out some or all of the cheque loan amounts, but you might have to wait a few days before getting it all. You don't have to wait if all you want to do is deposit the cheque so that your bank can start processing the payment as soon as possible. Most banks and credit unions allow you to deposit cheques with your mobile device, so you could do it from your couch in the middle of the night if you wanted to. If you need the money right away, you can cash the cheque, but it might take a little more work if you don't have a bank account.
If you write a personal or business cheque, the bank only has to give you the first $200 or so within one business day. Banks may handle government cheques differently. Usually, you can get all the cash one business day after the bank day. Thus, taking your cheque to the bank where it was written is the fastest and safest way to get cash.
That's the bank or credit union where the cheque writer's money is kept. You can get the money from that bank's cheque writer's account. If you go to a different bank, you can't be sure that the cheque is good and that the money is in the person who wrote it. If you don't have a savings account, you might have to pay a small fee of a few dollars to cash the cheque. You might even find that the bank won't cash the cheque for you because you're not a customer. Also, depending on the size of the cheque, you might not cash it because some banks impose limits on the amount of cash they can give out. Going to one of the bank's branches, which usually has more money, will help.
You can also cash a cheque at your bank or credit union. Since you are a customer, your bank should cash the cheque for free. But the cheque may take a few days to clear, so you probably won't know immediately if it will bounce. Most banks will let you take up to $200 out of your account immediately or within one business day, as long as everything seems legit. But if the cheque bounces, you'll have to pay that money back, plus a fee of as much as $35.
Even though it's not as easy as going to a bank, you can also cash a cheque at an ATM. Not every ATM, though, will let you do this. Some will only allow you to invest the cheque, and some don't let you deposit cheques at all. You can try to get cash at a store if your bank is closed, won't cash the cheque, won't give you more than $200 in cash, or if you don't have a bank account. You can cash a government cheque or a paycheck, but you might also be able to cash a small personal cheque.
