written by | April 26, 2022

Cashing a Cheque: What to Do?

When you receive a cheque, you have numerous options for cashing or depositing it. If you have a savings account, you can withdraw money from an ATM, a cashier, or net banking. Even if you don't have a chequing account, processing a cheque via other means, including a merchant, is a reasonably easy procedure. However, the ideal long-term answer is to open a current account, whether at a bank or by electronic banking that offers solid online current accounts; processing a cheque is free and quick.

Did you know?

The signature line on cheques is not a line at all. It’s actually the word ‘signature’ written over and over again.

How to Deposit or Cash a Cheque?

  • Use the facilities of a big retailer or your bank: Assuming you do not have a chequing account, visit the bank indicated on the cheque or a prominent merchant. When you're a banking client, go to your bank's offices or ATMs, or utilise mobile transfer if it's available via your institution's application.
  • Endorse the cheque: Place a signature on the reverse side of the cheque with your name on that X line before processing or depositing it.
  • Present the cheque together with identification. If you don't have a bank account, you'll most probably require presenting your identity, including an Aadhar card or another kind of official identification, to a retail worker or bank employee. After that, give over the cheque and take your money. When you're a banking client, you may show your ATM card and the cheque to an ATM or a bank employee. A banker may also request identification. Only after processing the cheque you will be able to withdraw money.

Also Read: What is a Bearer Cheque?

How Much Does It Cost to Cash a Cheque?

Clients can usually post or cash a cheque for free of cost at institutions. Large stores charge a service charge when you do not have a chequing account or require cash quickly.

Where to Cash a Cheque?

  • The bank or credit union that's on the cheque: A cheque must be accessible to take cash from the banking institution of both the corporate entity and the individual who wrote that. A non-customer cheque does not have permission to encash by national banks and credit unions. When they do, they usually require payment, which might be a fixed cost or a proportion of the cheque value. Certain banks may additionally need two kinds of identity cards.
  • Major retailers and grocery stores: Cheque cashing facilities are available at several big retailers for very few charges per cheque.
  • A vendor that can fill money on prepaid debit cards: When you are depositing a cheque, you can add it all to the card's account and make withdrawals with such a debit card. To do this, submit the cheque either using mobile payments depositing thru the card's smartphone application, when applicable, or by going to a big shop that is a member of a reloading system. Finally, now you can withdraw money, both at the retailer's store and at an ATM.

Where to Avoid Cashing a Cheque?

Payday loan shops are a costly substitute since they frequently take a proportion of the value of the cheque you're processing. You'll save money by using banks, prepaid cards, or a retail outlet.

Best Way to Avoid Fees: Get a Chequing Account

When it comes to handling cheques, the preferred choice is to go to your banking institution. You usually post the cheque first, so the entire amount will not be ready to take right away. However, you'll have to wait two business days. Having a bank account is beneficial because it's a free and simple function. In case you're banking account has been closed by a financial institution for some cause like outstanding overdrafts.

You can create a second attempt banking account with certain community banks. Recurring charges may apply to these accounts that might negate most of the cash you save by eliminating the payday loan broker. However, when you maintain a second opportunity account in great condition for around a year, then you might well be eligible for a free normal bank account, which would save you funds over time.

Tips for Cashing a Cheque

Receiving a cheque for payments poses a greater danger than taking payment. You might not realise there's an issue with the cheque till you clear it. Below are some pointers to keep in mind while processing a cheque:

  • Make sure the cheque is addressed to you properly. One must sign the cheque, and also, the spelling of your name must be correct.
  • Make sure the dates are correct, and the sum is correct.
  • Claim the cheque as quickly as possible and make sure it's legitimate.
  • Keep an eye out for telltale signals that you're working with a cheque fraudster.
  • Whenever clearing a cheque, search for completely free or fewer charge choices.

How to Cash a Third-Party Cheque

Both the individual whose identity is now on the cheque and the individual to whom they are giving cheque processing authorisation have to go to the cheque cashing location jointly.

The initial receiver of the cheque will provide specific approval for all of you to clear the cheque on the reverse of the cheque, and each of you also provides an individual's identity to the banker. Whenever you withdraw cash in somebody else's name, people call it a third-party cheque. For instance, your acquaintance might not have had a chequing account and wishes to save cheque cashing expenses. They may authorise you to collect their cheque on their behalf. The process of collecting the money on behalf of somebody else is a third-party cheque.

Common Types of Cheque Fraud Scams

  • Excess of purchase price: The purchaser "inadvertently" starts sending a cheque for more than anticipated and requests that the complainant give the money back. After a few days, the banking institution finds the cheque is bogus, and you must repay the entire sum.
  • Sold goods- A purchaser from another country gives for the items you're offering and requests that you deliver those. You will have no other option than to throw the invoice since the cheque doesn't ever pass, among the most popular kinds of cheque fraud schemes is something like this.
  • Surprise bonanzas: Perhaps the sufferer may be told that they have won a lottery or a competition sponsored by a genuinely sounding company. Nevertheless, the complainant must first spend a processing cost, including the transaction tax. The organisation has been "considerate" enough to attach a cheque to reimburse the taxes charge. The cheque fails whenever the complainant deposits it. 

Why Do These Scams Work?

These schemes operate because bogus cheques resemble actual cheques in appearance, including to bank workers. The personal details of reputable banking firms are frequently imprinted on them. They could even be legitimate cheques written on identity fraud clients' chequing accounts.

Also Read: Everything about Banker’s Cheques & How to Use Them

Simple Cheque Fraud Prevention Techniques

Recognise that crooks have honed their skills. Defrauding banking institutions no more necessitates the use of expert criminals. Standard fraud cheques have become more enticing to scammers as a result of technological advancements and organisations' increased focus on other kinds of theft. Everything it requires for crooks to succeed and you to forfeit is decent printers and great account information. Modern theft systems use real-time, confidential cloud-based identity verification technology to prevent illegal transfers from affecting your banking institutions.

Conclusion

I hope you've grasped the concept of how to cash a cheque and the frauds that go along with it. Keep in mind when you're paid by cheque, you could either take it or post it to obtain your money. Whatever path you choose, it's critical to keep costs low and prevent expensive blunders.

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FAQs

Q: What is the time limit for cashing a cheque?

Ans:

In most cases, cheques are only valid for 180 days, after there is no requirement that institutions have to honour them. When you wait much longer, the cheque maker may liquidate their accounts or use the money allocated for your cheque, resulting in your cheque being bounced. You must deposit the cheque or cash it as quickly as practicable.

Q: Is it possible to cash a cheque without having a bank account?

Ans:

To cash a cheque, you wouldn't have a chequing account. The cheque writer's banking institute or cheque cashing shop is among your greatest choices for cashing the cheque. You would almost certainly require paying the price for these services in most circumstances.

Q: What is the average time it takes to cash a cheque?

Ans:

Cashing a cheque at a financial institution is a fast procedure that involves merely a few moments. Nevertheless, it's possible that your cash won't be fully accessible for close to one week.

Q: What is the procedure for cashing a cheque for a minor?

Ans:

With a couple of simple steps, a parent could collect or post a cheque for their minor kid. All you have to do is type your child's name on the cheque and mention "minor" beneath it. Then write your identity and connection with the kid on the cheque and approve it as usual.

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