Living Without A Checking Account

Not Having A Checking Is Tough

Living without a checking account is tough to say the least but according to US News 6.5% of households in the country do not have a primary banking account. They call them the “unbanked”. While this number is dropping, that is still a lot of people facing some banking related issues on a regular basis.

The chief problem that the “unbanked” face on a regular basis is cashing a check. Without a regular checking account just getting your paycheck every couple of weeks is a challenge. You have options when it comes to check cashing and some, as you will see, are obviously better than others.

Cashing A Check Without A Bank Account

Simply getting your money on payday should not be that difficult but without a checking account it can be a chore. You have lots of options as far as check cashing goes, but most are going to cost you. If you had your own checking account, you could deposit free of charge or even take advantage of direct deposit transactions but since you do not, you need to find a work around. Here are the best options available to you.

Let The Issuing Bank Cash It
First, you could take the check to the bank that issued it. They would be able to cash it for you for a nominal fee, usually just a few dollars. Just about every bank charges this fee but a few will still cash their checks free of charge, even for non account holders. Capital One is an example that comes to mind. Of course, with Capital One closing branches left and right in an effort to stay profitable, this option may not be available to you.
The cost to cash a check is just a few dollars but it will vary from bank to bank. Chase & Bank of America currently charge $8, Wells Fargo charges $7.50 and US Bank charges $7. Whichever one you go to, be sure to bring two forms of ID with one being a government issued photo ID. The second piece of ID can usually be anything with your name on it, such as a credit card.
Take Your Check To A Check Cashing Store
Your next option is to go with a check cashing service. You know where they are, usually they have bright yellow signage and are attached to gas stations. They offer check cashing and usually payday loans as well. Not always the nicest of places but they will get you money in a hurry. They will get you the money right away but will charge you a 1% fee, on average. In addition to that fee, some check cashers will also add a flat processing fee to the bill, so lookout. The check cashing service might be convenient, but it will be your most expensive option.
A smarter option if you go the check cashing route is to check out Walmart. They offer a check cashing service in store and are much cheaper, even cheaper than most banks. They currently charge a flat fee and can cash a check up to $1000 for just $4. Checks greater than $1000 are only $8. This is a much cheaper option than check cashing stores and with the availability of Walmart locations, it should be a convenient choice for most people reading this.
Let A Friend Or Relative Cash Your Check
A final option is to sign the check over to someone who has a checking account. They can deposit the check in their account and then give you the money with no fee at all. This option is best if you have a parent or relative with a good checking account. Once the money is in their account it would be difficult to prove the intent was to get the money back, so trust is key.
This is certainly the cheapest option to cash a check but it is fairly inconvenient for both parties involved. If the purpose of the check cashing is to get the money from your paycheck, and this was a regular thing, it would get old very fast.

Cashing A Large Check Without A Checking Account

Large checks are a bit problematic to cash without a checking account. Large checks are considered those for amounts in excess of $5,000. These are riskier for banks to cash and they will therefore make you jump through a few hoops. This means that in many cases you will not get your money right away.

In order to cash a large check, you will need to visit the bank that issued the check. Bring with you two forms of identification with one form being your government issued photo identification card. Some banks will cash the check the same day, but they do not have to. The bank will have up to 7 days to process the check. You should expect to have a thumb print taken and the bank will need to fill out some paperwork. If the check is for over $10,000, it will also be reported to the IRS. In addition to all of this, there will be a fee.

It sounds like a lot of effort and maybe even unreasonable but banks have to follow rules established by Regulation CC from the Federal Reserve. Don’t think that they are just trying to be difficult, there are rules and procedures to follow.

Should You Get A Checking Account

Now that you know how to cash a check without a checking account, let’s answer another question. Why don’t you have a checking account?

For many, it is because they do not trust banks for others it might be that they think they do not have enough money. Still others might have had a problem with a checking account and think that they can not get one. For all of you, there is help.

If you just don’t trust banks, you should know that banks are insured by the Federal Government. The FDIC insures each individual account for up to $250,000.

If you think that you do not have enough money, it is okay, you do not need that much. There are many free checking options out there. Most will have $25 minimum opening deposits required. Once the account is open, most will have no minimum balance requirement.

Finally, for those who have run afoul of another bank, look into second chance checking. Many banks offer it and it can get you back on the right track.