What are the Rules and Regulations on Cheque Cashing?

Like any other business transaction, cheque cashing is governed by various laws and regulations, mostly formulated at the federal level. You can cash in cheques at a cashing store, a bank, or any other state-authorized establishment for negotiating cheques. If you intend to be cashing in your cheques, here are rules you should know about.

Identification

To transact with any cheque cashing establishment, you must prove your identity by presenting your original government-issued identity card. While some establishments overlook this procedure, they may suffer later if the cashed cheque goes unpaid by the issuing bank or the cheque owner commits fraud. As such, most cashing centres and banks must get both your ID and your thumbprint signature.

Fees

Unlike traditional banks, most cheque cashing bodies rely majorly on the fees charged for making a profit. In most places, the government has not put a fee regulation rule or limits to the fees. This has most bodies extorting monies from their clients. However, shopping around helps you to get the hang of how much fees you should expect to pay for a cheque of a specific value. Most people charge a maximum of 10% of the value of the cheque.

Banks

It is possible to cash in a cheque at the bank where the funds are to be drawn even if you do not own an account with that bank. As part of making profits, the bank will charge non-account holders a certain fee for the service. However, note that the bank is under no obligation to cash your cheque if you do not hold an account with them. However, if you are an account holder, the bank is legally bound to cash the cheque for you unless you have been flagged for suspicious activities.

If you present your cheque six months after it was issued, it will be categorized under stale cheques, and the bank will not honour it. Cheque cashing is easy and convenient. Make sure to follow all the rules.