Why wait three days for money you could receive now?
While cheques aren’t as common as they used to be, they are still a financial staple for many businesses and individuals. The trouble is, waiting three to five days for a cheque to clear can put a serious strain on your business’ cash flow, or even your own financial situation. It’s important to know there are providers available that can cash cheques for businesses and individuals and provide them instantly with the money that’s owed to them.
Related: If you don't want to use a cheque cashing service, you could consider comparing your short-term loan options.
What is cheque cashing?
As cheques usually take three business days to clear with banks, cheque cashing services can clear your cheque within minutes. This service is usually provided in exchange for a small fee, as the lender providing the service is taking on a risk by forwarding you the money before the cheque clears.
How does it work?
If you or your business has a cheque that needs clearing immediately, you have the option of paying a fee to bypass the normal three-day waiting period. There is a waiting period because a cheque basically acts like written instructions between two financial institutions, and the waiting period gives both institutions time to make sure the payment is made correctly.
Lenders that provide cheque cashing services are essentially forwarding you the money, as they have no guarantee that the cheque will not be dishonoured. Cheques are dishonoured for a number of reasons, although a common one is that there are insufficient funds in the payer’s account. Cheque cashing providers will forward you the money for a fee, which is usually a percentage of the cheque amount, as they wait for the cheque to clear. All you have to do is provide 100 points of ID.
Types of cheques that can be used
Different service providers will have different criteria, but may generally honour the following types of cheques:
- Business cheques
- Company cheques
- Bank cheques
- Account payee cheques
- Government cheques
- Benefit cheques
- Gaming and lottery cheques
- Insurance cheques
How to cash a cheque
- Take the cheque to your bank and request the money to be deposited in your account OR
- Deposit the cheque at your bank's ATM if your bank is closed
- Wait one to three days for the cheque to clear or request a special clearance OR
- Take your cheque to be cashed at an instant cash chequing retailer
Pros and cons of cheque cashing
- Near-instant access to money. You will receive the cheque amount immediately, minus fees, instead of waiting three days for it to clear at the bank.
- You don’t need a bank account. You can opt for the cheque to be paid out in cash, meaning you will not need a bank account to receive the money.
- Transparent fees. You will be charged an up-front fee, but will avoid the fees that may be associated with opening and maintaining a bank account, such as ATM fees.
- Convenience. You do not need to travel to your bank branch to cash your cheque.
- You will be charged a fee. This may be a percentage of the cheque amount or a fixed amount. The fee will vary between different providers and can often be quite high.
- Restrictions. Some providers may refuse certain types of cheques or have limits on the amounts that can be cashed out.
How you can compare cheque cashing services
Cheque cashing providers can be a convenient option for you to consider if you need a quick turnaround time for your cheque, but it’s important that you choose the right provider. Here are a few things to keep in mind when comparing your options:
- Turn-around time. As this is likely to be the main reason you’re opting for cheque cashing services, you should check how quickly you can expect to receive the money. Some lenders may be able to provide you the money within a few minutes, while others may take longer.
- Fees and charges. All cheque cashing providers are likely to charge fees, but the question is how much? Some may charge you a flat fee, while others may charge you a percentage of the cheque amount.
- Restrictions. Some providers may have restrictions as to the kinds of cheques they will cash, whether they be business, personal, government, etc. They are also likely to have limits on the cheque amount they are able to cash. Check these restrictions before you apply.
Which lenders can cash my cheque?
The following lenders have branches and offer cheque cashing services:
- Cash Converters
- OK Money
- Jacaranda Finance
- Cash Stop
- City Finance
- Money Plus
Is there anything you should avoid when you cash a cheque?
You should avoid cashing your cheque with one of these providers before you take into consideration all of the associated costs. You should really only consider getting your cheque cashed by a third-party lender when waiting three days is not an option for you. Before you cash your cheque, weigh up the cost of the associated fees you will be charged against the value of receiving your money earlier.
Alternatives to cheque cashing
- Bad credit applicants considered
- Fast approval service
- Borrow up to $2,000
100% confidential application
Sunshine Short Term Offer
A short term loan with a fast and easy application available to those with good or bad credit. You can apply today and get approved for up to $2,000.
- Loan amount: $2,000
- Loan term: 9-15 weeks
- Turnaround time: 30 minutes (conditions apply)
- Fees: 20% of borrowed amount + 4% of borrowed amount each month
- Income requirement: 50%+ of income cannot be from Centrelink
- Bad credit borrowers OK
- Quick and easy Approval
- No Credit Checks
If you are thinking of getting your cheque cashed at one of these providers instead of your banking institution, a payday loan might be an alternative. They offer short-term loans until your next payday and can provide a fast turnaround on cash if needed. Remember, you should compare your options first before applying for any payday loan.
Frequently asked questions
Are cheque cashing services safe?
Generally, it is perfectly safe to use a cheque cashing service, but you should always research the different providers before choosing to use the service as fees can vary dramatically.
What fees will I have to pay?
This will vary depending on the service provider. Some charge a flat fee while others will charge a percentage of the cheque amount.
What will I need to bring?
This will also vary by provider, but you will generally need to bring the cheque, personal identification and may also need a business registration certificate if you are cashing a cheque on behalf of a business or company.