If you are like most banked consumers, you have probably never tried to cash a check at a financial institution where you are not a customer. On the rare occasion that you have had to do so, you probably got hit with a fee, which varies from bank to bank.
STORY UPDATED to highlight the cost of cashing a check at someone else’s bank.
Cashing a check at a foreign financial institution is not top of mind for most people because the scenario does not often present itself. You can only cash checks that draw on accounts from the institution that issued it and most would prefer to handle their accounts at their own personal institution.
With TD Bank’s (NYSE: TD) recent announcement that they will impose a $5 fee on all checks cashed by non-customers starting February 1, we decided to investigate what other banks charge for this service. The results could not be more erratic.
Why the fee?
The funny thing is that most bank tellers could not explain why their bank charges the fee, citing bank policy and offering to open an account over the phone. Consumers would consider this typical of bank fees – no valid explanation other than, “we do not like you if you do not bank here.”
This is further emphasized by the fact that the banks could not disagree more on how much, or in what capacity, this service actually costs them. While some banks differentiate between business and personal checks, others impose arbitrary limits on how much the check can be valued for them to cash it. A few rare gems still do not charge any fee at all.
Ideally we would all like to avoid these charges, but if you do find yourself in a situation where you need cash and must utilize a bank that is not your own, make sure you have two forms of identification to be safe – although some only require one.
The table below shows how some of the largest U.S. banks manage this fee:
Cash Checking Fee for Non-Customers
|Bank of America||$6|
|Capital One||$0 for all checks, but will not cash personal checks|
|Citibank||$0 for checks under $5000, will not cash checks over $5000|
|Fifth Third||$4 for checks under $400, 1% of the check's value if it's over $400|
|First Citizens||$6 for business checks, $0 for personal checks|
|Huntington||$6 for checks over $200, free for checks under $200|
|PNC Bank||$10 for checks under $1000, will not cash checks over $1000|
|U.S. Bank||$5 for checks over $50, free for checks under $50|
|Wells Fargo||$7.50 for business checks, $0 for personal checks|
While the fees you incur rival the terribly maligned, independent check cashing services, unfortunately for the estimated 30 million Americans who have no ties to the banking industry, these are the only options.
You should also take note that these ‘evil’ services are actually much more affordable than the big banks when cashing government, payroll and similar checks. One service, Pay-O-Matic cashes checks for 1.86 percent at the time this article was written. It’s the personal checks that demand your attention.
If we missed a bank that you would like to see included, please contact us or let us know in the comments section below.