The Requirements to Cash a Check

Although debit cards and online payment services have greatly reduced the number of checks that most people write, there are still many situations when checks are used for payment. Many employers pay with paper checks and some companies issue refunds and rebates in check form. Encash check and cheque encashment are financial terms used for the exchange of a check for money. There are several requirements you must meet to complete this type of transaction.

A check, or cheque, is a piece of paper that promises payment from a bank account. It's made out to a specific person and signed and dated by the owner of the bank account. It includes an amount that is to be paid when the check is cashed. An uncashed check is good for 180 days (six months) from its issue date. Beyond that time, banks are not required to honor the check.

When you're ready to cash a check, first endorse it by signing on the back in the area indicated. A check can only be endorsed and cashed by the person it's made out to, unless that person signs it over to someone else. You do that by writing "Pay to the order of," followed by their name when you endorse the check. A check that has been signed over this way is known as a two-party check. Asking a friend or relative to let you sign a check over to them is one way to cash a check if you don't have a bank account.

If you have a checking or savings account at a bank or credit union, you should be able to visit a local branch and deposit it into your account after filling out a deposit slip and showing valid identification or your bank debit card. You can also deposit a check from an ATM using a debit card. Some financial institutions, including Bank of America and U.S. Bank, let you deposit a check remotely with a smartphone app that uses the phone's camera to take pictures of the front and back of a check being deposited.

If you want to get back some or all of the check in cash, your bank may have some restrictions. You will probably be required to have an equal amount of money in your account in case the check is returned for insufficient funds. After depositing a check, some or all of the money may be frozen by your bank until the check clears, which can take several days.

Banks are not required to cash checks if you don't have an account with them. If you visit the check-issuing bank and don't have an account, you will be required to show identification and may be charged a small flat fee or a percentage of the check amount to cash it. Many banks try to persuade check cashers to open an account to avoid paying a fee to cash checks.

The term "check and cash" refers to retail stores and businesses that cash checks. Walmart and some grocery chains offer encash check services for a fee, which in some cases may be less than the fee charged by the issuing bank. The entire amount of the check is paid in cash after proper ID is shown and the fee is paid.

At Walmart, the fee is $4 for preprinted checks up to $1,000 and $8 for checks up to $5,000. Preprinted checks are those that have been personalized for the check signer. The fee for two-party checks, which are checks that have been signed over to a third party, is $6. The limit for two-party checks is $200.