The Difference Between Banks and Check Cashing Places | Currency Exchange Association (2024)

FAQs

What is the difference between a bank and a check cashing place? ›

Check cashing services are quite different than banks or credit unions in that they generally offer few services other than providing temporary loans at a considerably high rate of interest and cashing paychecks. Check cashing businesses are governed by state law.

Banks are notorious for holding funds, and it can be incredibly frustrating. However, check cashing places make it easy to get your cash right away. In fact, one of the biggest benefits of going to a check cashing place versus a bank is that you know you'll walk out with cold, hard cash.

Checks can be used to make bill payments, as gifts, or to transfer sums between two people or entities. They are generally seen as a more secure way of transferring money than cash, especially with large sums.

Cashier's checks are signed by the bank, while certified checks are signed by the consumer. Cashier's checks and certified checks are both official checks issued by a bank. Both are easy to get, relatively inexpensive and considered more secure and less susceptible to fraud than personal checks.

Cons. Chief among the negatives are the fees that check cashing services charge, fees which continue a difficult cycle for low-income users who are seeing some of the little money they earn, go to a service just to cash a check.

The advantages include personalized service and access to advice from professionals to navigate finances more effectively. However, retail banking has some drawbacks, such as higher fees. Retail banks offer different types of accounts, including checking, savings, and credit cards.

One of the major downsides of traditional banking is the potential for fees. Traditional banks often charge various fees for services such as overdrafts, ATM withdrawals, and account maintenance. These fees can quickly add up and eat into your savings if you're not careful.

Money orders work in the opposite of checks – you exchange money (typically cash) for a piece of paper that represents that amount of money. You can purchase a money order at several places besides the bank, such as post offices, convenience stores, grocery stores, and more.

What is the difference between currency and cheque? ›

A check is designed to transfer money between two parties, one time. The issuer has money in the bank to cover it ultimately being cashed. Money (dollar bills) is issued by the government and is intended to transfer value between any two parties any number of times.

“Cash” means currency and coins. The item has been paid for in full at point of purchase. “Check"means paying with a negotiable instrument that gives the person named as payee the right to access funds in a bank account. Paying by check is a privilege since someone must trust that funds are sufficient to pay.

Cash your check at the issuing bank

Many banks will cash a check that is written by a checking account holder at that bank, even if it is payable to a noncustomer. There must be enough money in the payer's account to cover the check.

Local Banks or Credit Unions

The simplest way to cash a check, whether personal, payroll, certified, cashier's or government-issued, is through a bank or credit union where you already have an account. Check cashing can be completed in person at a local branch or deposited using your bank's mobile app.

Here are some common scenarios: 1. Percentage Fee: Some check-cashing places charge a percentage of the check amount as a fee. For example, a place might charge 2-3% of the total amount of the check as a fee. 2.

Cash it at the issuing bank (this is the bank name that is pre-printed on the check) Cash a check at a retailer that cashes checks (discount department store, grocery stores, etc.) Cash the check at a check-cashing store. Deposit at an ATM onto a pre-paid card account or checkless debit card account.