If you’re looking to understand the reasons why a bank will not cash a check, you’ve come to the right place.
In this article, we’re going to cover nine reasons why banks might reject you when trying to cash a check.
Not surprisingly, this is a common question for both individual and business banking customers who rely on checks for their income.
Please note, if your interest is in setting up a business that will generate revenue via check-based payments, you might want to consider the USA over jurisdictions like UK for company registration.
This is because opening a UK company bank account as a non-resident in order to cash checks can be more challenging than in the US.
Feel free to use the table of contents to jump ahead to any sections that are immediately relevant to your search.
Table of Contents:
Reasons Why Banks Will Not Cash a Check
Let’s dive right into the nine reasons why a bank may choose not to cash a check:
1. Check Expired and Is Considered Stale
If you are trying to cash a check that is past the notice period stated by the issuing bank, it’s very possible that the bank will refuse to cash the check.
If this happens, there is very little recourse. In most cases, you will need to request that the issuer voids the check and issues a new check to you instead.
2. You Don’t Have Proper Identification
In order to execute any transaction, banks need to verify the parties involved. This is true whether sending a wire transaction or cashing a check in your name.
So, if you can’t present the proper identification, banks are typically required to refuse to cash a check for you. If this happens, you simply need to return to the bank with government-issued identification and they will likely be able to cash the check for you immediately.
3. You Don’t Have an Account at the Bank
Surprisingly, banks are not required (at least in the United States) to cash checks to an individual if they do not already have an account at the bank. Of course, most banks will still cash checks for non-customers. As long as they can provide valid government-issued identification and none of the other reasons on this list apply.
However, if the bank refuses to cash a check because you do not have an account, you may want to visit another branch or simply set up a basic no-fee account in order to resolve the problem.
4. The Value of the Check Is Too Large for the Bank
While large banks will typically support most check values, it’s not uncommon for a bank to refuse to cash large checks over a specified level.
With this in mind, if you do plan to cash a large check, it’s often best to call the bank ahead of time. Doing so allows you to confirm whether they have any limits in place. And, if the value of the check you want to cash is above the bank’s limit, try explaining the situation. But also, ask if it would be possible to make an exception.
If the bank refuses to cash the check because of the value, you will likely need to deposit the check into your bank account instead. Then, you can withdraw the money in accordance with the terms of your account.
5. Banks May Refuse Endorsed Checks
If the check has been endorsed (signed), banks may refuse to accept the signature. In certain instances, the bank may require the endorser (the person to who the check was originally made out to) sign the check at the bank in person. This allows the bank to verify the identity of the endorser. But it also confirms that you are in fact eligible to receive the balance owed from the check.
6. Bank Suspects the Check Is a Fake
Check fraud is unfortunately very common. As a result, many banks take extra precautions when reviewing and verifying checks to make they are real. Not surprisingly, if a bank suspects that a check is fake, they will obviously refuse to cash the check.
If this happens, it is usually best to return to the bank that issued the check originally and ask them to cash the check. If the issuing bank refuses, you may need to ask the person or business that originally wrote the check to you to write you a new check.
7. Banks May Require You to Deposit the Check Instead of Cashing
One final reason why the bank may refuse to cash a check is that they want you to deposit the check instead. This is common for new account holders who do not have an established transaction history with the bank, especially if the check balance is significantly larger than the balance held on the account.
If this happens, you can either request to speak with a manager to explain the situation and hope that they cash the check (or deposit the check balance) and then proceed to withdraw the money from your account as usual.
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