When you write a check, it is not always necessary to identify the person receiving the money. You might, for instance, be able to write a check that states "Pay to the order of: Cash." While this may seem like a simple option, it also indicates that the check can be cashed or deposited by any person.
Find out the advantages of writing a check payable to cash and the possible drawbacks and dangers that it may be involved.
- One sort of check that can be cashed by the person who has possession of the check, regardless of whether or not that person is the intended recipient of the check, is a check that is made payable to cash.
- If you do not know who the check's payee is or if you need to write yourself a check to acquire cash fast, it can be handy to write a check to cash. You can cash the check at any bank that accepts personal checks.
- A check payable in cash carries an inherent danger since, if the check is misplaced, virtually anyone who discovers it will be able to cash it.
What is it like to cash a check?
When writing a check that is payable to cash, write "Cash" on the line where you would ordinarily write the payee's name. Because the check is not made out to a specific person or organization in this scenario, everyone who has the check can cash it or deposit it into their bank account.
When you write a check, you have to indicate who should receive the money; in fact, most checks are written out to a particular payee. Because only the person identified on the check is permitted to deposit or handle it, checks are considered a more secure payment option than cash. However, you can sign over a check to another person, which is something that we will go over in the following section.
A check made payable to "Bearer" operates in the same manner as a check made payable to cash: any person who has the document can cash the check. A check payable to cash is the same thing as cash in that it can be used by anyone, provided that the check does not bounce. Nevertheless, if you do not stop payment on the check first, the person who finds it after it has been lost can cash it or deposit it in their account. Similarly, the person who receives the cheque can transfer it to another person.
Why should someone write a check to cash it?
Here are a few scenarios in which a person would find it advantageous to write a check that they intend to cash. Below, you'll find a breakdown of each of these.
If you don't know to whom the check should be made payable, a straightforward answer is to write a check payable to cash. For instance, you may know that you need to write a check for a particular amount. Still, you might not be familiar with the payee's full name (also known as their legal name). If this is the case, you can make a check payable to cash, place it in your pocket, and not bring your checkbook along.
Or, if you are a renter and send a check to a new landlord for the first time, you may leave the check blank or write "cash" when you send the check. Either way, the landlord will know that the check is for cash. This makes it possible for the landlord to write their name on the check after they have received it. However, suppose the check is stolen or intercepted by another person for any reason. In that case, that person will be able to cash the check afterward.
Paying your own self
There is also the option of using "cash" if you want to write a check to yourself and then withdraw cash from an ATM. To avoid using a check and the need to wait for a teller or deposit your check online, it is simpler to withdraw cash from an ATM. This is because you won't have to do any of those things. In a similar vein, when moving money from one bank account to another, it is frequently simplest to transfer payments online instead of dealing with cheques.
Are there any downsides to writing a check to cash?
Writing a check that is payable to cash could seem like a convenient option. Still, it comes with more potential downsides than potential upsides.
Potential financial harm
Because you do not have any say in who deposits or cashes the check, it is in your best interest to steer clear of writing checks that are intended to be cashed. If the check is misplaced or stolen, both you and your financial institution will be required to keep a close eye on the account for any suspicious activity.
Sending a check through the post is a method that is considered to be relatively safe for sending a check. However, it may be in your best interest to include tracking and signature confirmation to guarantee the check's delivery.
There is a possibility that banks could be hesitant to cash the check
Another reason to avoid utilizing checks payable in cash is that some institutions look down on them as an unacceptable form of payment. Suppose a person receives a check payable to cash, for instance. In that case, Citizens Bank asks them to provide a valid picture identification card in person at a bank's local branch.
Banks might also choose not to honor these checks or keep the funds on hold for a more extended period. Financial institutions can likewise decline the provision of official checks payable to cash. For instance - if you want to buy a used car from someone you don't know, the bank won't be happy to give you a cashier's check until you have the exact name of the person receiving the payment.
A paper trail
It is more difficult to keep records and document transactions when a check does not specify to whom the payment is to be made. Even while it is still feasible to take notes and keep track of your costs, having the payee's name printed on the face of a check makes everything more straightforward and more official. You won't have to worry about deciphering anyone's signature or figuring out where the money went if you write the payee's name down.
How to make a cash check available for deposit
When you get a check payable to cash, you should deposit it the same way you would deposit any other check. Endorse the check by signing it on the back, and then deposit it with your financial institution or credit union. Find the bank's name printed on the check's front, and then call the location of the bank's branch that is closest to you to find out if they will cash the check. You may be required to make a personal appearance at the financial institution that the funds are drawn on to cash the check rather than deposit it into your account.
Other options besides writing a check that is payable in cash
Consider leaving the payee line blank on your cheque for the time being as an alternative to writing a check that anyone can cash. After you understand how to complete it correctly, you can enter the payee's information. Anyone can negotiate a check made out to cash or a blank space where the payee's name should be. However, if someone steals the check from you and writes someone else's name on it, it won't be your handwriting.
You also choose to write checks payable to yourself and then sign them over to anybody you wish once you have determined who the appropriate payee is. This approach might be more secure, but financial institutions have the right to decline to accept checks that have been previously endorsed. If this occurs, you will have to begin the process again.
Keep in mind that financial institutions have the right to decline cheques payable to cash or request longer hold times. Make it simple for people to pay you appropriately by ensuring that any checks you receive include your name or your firm's name whenever possible. Anyone who will be writing checks to you should be given clear and concise instructions, lest they be tempted to cut corners in the process.
Frequently Asked Questions (FAQs)
Do you write the check out to "cash," or do you make it out to yourself when paying with a credit card?
Writing a check to be cashed at a convenience store is one option, but writing a check payable to yourself adds an added degree of protection against the possibility that your check will be stolen and cashed by an unauthorized party.
Is official identification required to cash a check?
You can pay a check even if you don't have identification in most situations; however, your alternatives may be restricted. Suppose you cash the check at a grocery store. You might avoid showing your identification, but you might also have to pay fees associated with check-cashing. Depositing checks with a debit card is an option at some automated teller machines.