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 who 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 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 who 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.
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
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.
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
Sunshine Short Term Offer
This is a short term loan offer with a fast and easy online application for bad credit borrowers who are employed. You can apply today to get approved for up to $2,000.
- Loan Amount: $2,000
- Loan Term: 9 weeks
- Turnaround Time: 30 Minutes - conditions apply
- Total Cost of Borrowing $100: 20% of borrowed amount + 4% of borrowed amount each month
- Bad credit borrowers OK
- Quick and easy Approval
- No Credit Checks - Must be employed
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 offer a fast turnaround on cash if you needed. Remember, you should compare your options first before applying for any payday loan.
Warning about Borrowing
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
- For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
- Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
- If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
The Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.