USD INR ₹ 84.00
GBP INR ₹ 102.77
CAD INR ₹ 60.67
Articles

Complete Guide to Writing and Cashing Checks

Updated on August 23, 2022 01:09 pm
writing a check

A check is a written, dated, and signed valuable document that serves as an instruction to a bank to pay the bearer a certain amount of money. 

If you are the one writing the check, you are the payor, and the person to whom you are writing the check is the payee.

There are many types of checks, such as: 

  • Personal checks
  • Cashier's checks
  • Traveler's checks
  • Certified checks

Checks are still used today, even though they are becoming less prevalent in the digital era, given the abundance of online options for sending money. You might still use checks to pay your rent or to cash checks you receive as gifts from your elderly uncle.

This article will teach you all you need to know about writing checks, including how to write them step-by-step, cash them, identify fraudulent checks, and much more.

How To Write A Check: Step-by-Step Guide 

6 Easy Steps to Write a Check:

  • First, write the date in the box or line that says "Date" in the upper right corner of the check. Always write the same date that you signed the check.
  • Next, write the name of the recipient on the line next to the words “Pay to the order of.” If it is a person, write their first and last name. If it is a company, make sure you have their company name correct for payments. If you write “Cash” here, anyone can cash the check and get the money from your account.
  • Fill in the amount next to the dollar sign ($) in numerals. Write the pennies, even if that amount is zero. For example, $100.00. (Avoid leaving any blank spaces in the box to prevent fraud so that no one may alter the dollar amount or cents you like to pay. To ensure there is no blank space before or after the number, draw horizontal lines in the box.)
  • Next, write the dollar amount again, but in words, with cents as a fraction. To prevent someone else from writing on your check, fill in the space by writing the amount as far to the left as you can or draw a line afterward.
  • The memo line is optional. You can specify the purpose of the check, such as rent or utility bills. Although it is not essential, knowing this can help you manage your finances.
  • Sign the check in the bottom right corner of the check. If you don’t sign the check, it won’t be valid.
  • Finally, tear off the check if you are using a checkbook. The top copy is what you give your recipient. A carbon copy is the second, lighter copy that you can preserve for your records. Some banks will print out a check for you at the teller if you don't have a checkbook.

What Are The Numbers On The Bottom Of The Check?

You will see along the bottom of the check three groupings of numbers printed there. The first is the routing number, the second is the account number, and the third is the check number. 

Even if you don't need to be familiar with these when learning to write checks, it's nevertheless beneficial to know what these numbers stand for if a fake check is being presented.

Routing Number: Your bank's routing number serves as an identification number and is unique to each bank. If in doubt, check your bank's routing number.

Account Number: The number immediately to the right of the routing numbers is your bank account number-the account from which the check is drawn.

Check Number: This number serves as a unique check identification. It can be found in the check's top right or bottom right corners.

What Is A Blank Check?

If you don’t fill any amount on the check even though it has been signed by you, the check is a blank check.

How To Write Cents On A Check?

For example, if you have to write a check for $700.50, it would be written as ‘seven hundred dollars and 50/100’. You have to write the cent in fractional format when you are writing the amount in words. 

How To Write a $1000.00 On A Check?

You have the write $1000.00 as ‘one thousand dollars and 00/100’.

What Do You Write On The Back Of A Check?

You will need to write your signature on the back of a check that is written to you. Only then will you be able to cash it. Additionally, if you are depositing the money into that account, you must include particular information, such as the account number.

What To Write On The Memo Line On A Check?

The memo line is to write the purpose of the check, such as rent or utility payments. This is optional. But it is a good idea to use the memo line to remind you of the reason for writing the check. Later on, it will be much simpler for you to maintain track of your finances or balance your records.

Can You Write A Check To Yourself?

You can write a check to yourself by putting your name in the Pay to the order of” field. To cash it, you sign the check on the back of it. You can do this if you wish to transfer money from one account to another account.

How To Cash A Check?

The act of converting a check into actual cash after receiving it is known as "cashing a check."

To cash a check made payable to you:

  • You must first sign on the back of the check to endorse it.
  • You can cash it or deposit it online, if available, or bring it to your local bank office to deposit it into your account.
  • Bring identification or a bank card to the location where the check can be cashed.
  • Write the account number on the check's back if you plan to deposit it directly into an account.

The majority of checks clear in two business days. 

You can go directly to a bank location and ask to have the checks deposited and paid right fast if you need the money in your hands right now. You might be given the money right away by a teller.

Delays may occur because banks must also confirm the validity of the deposit to guard against fraud and potential losses from risky deposits.

How Long Do You Have To Cash A Check?

More than six months old checks are typically not accepted by banks. If you wait too long, there's also a potential that the check writer will close their account or utilize the money set aside for your check, leading the check to bounce. It’s always best to deposit or cash a check as soon as possible. 

Can You Cash A Check At An ATM?

Yes. Although it is not as simple as cashing a check at a bank, you can cash a check at an ATM. Keep in mind that not all ATMs will have this feature; some will merely let you deposit the check, and some won't even accept it.

Simply bring your check, your bank card, and a pen (to sign the check) to the ATM if it accepts checks, and then follow the on-screen instructions. You might need to have enough money already available in your account before the ATM can dispense the funds on the check.

Can You Cash A Check Online? 

Online check cashing is possible with mobile banking. You can complete it quickly and easily from the convenience of your home. Open the mobile app for your bank, find the check deposit page, and follow the on-screen directions to deposit a check online.

To deposit a check directly into your account, you might need to take a picture of it with your smartphone and submit it using the mobile app for your bank.

Can I Cash A Check At Any Bank?

Not every bank or credit union cashes checks for people who are not their customers. Only particular kinds of checks, such as government or salary checks, may get cashed at such banks. Banks favor checks that have guaranteed funds, such as certified and cashier's checks.

Call ahead and bring your ID if you're heading to a bank where you don't have an account so that the bank can be sure the appropriate person is receiving the cash. IDs can include:

  • Your driver’s license
  • Passport
  • Government-issued photo ID

If you don't have an account, banks will charge you a fee to cash a check. You may have to pay a flat fee of roughly $6 to $10, or the larger of a minimum fee or a percentage of the check amount, like 1%.

The best place to cash a personal check is the bank that issued the check. Look for the name or logo of the bank on the check to identify the issuing institution.

Remember that it should cost nothing to deposit a check into your checking account, and within a day or two, you can withdraw money from an ATM or bank branch.

In addition, banks normally only cash checks up to $5,000. However, this can vary from bank to bank. For checks over $5,000, banks frequently impose a higher fee.

Where Can I Cash A Check?

You can cash at a bank, a credit union, a check cashing business or a few retail places. However, you must be aware that you cannot simply stroll into any bank and expect the teller to instantly convert your cheque into cash. If you don't have an account with the bank, the banks may not cash your checks. 

You can also do it online using your bank’s mobile app. 

Here are some places where you can cash checks if you don’t have a bank account. They will charge for it, and the fees will vary.

  • Check cashing stores: You can cash small-business checks, personal checks, insurance checks, and money orders. Before you cash your checks, enquire about their fees.
  • Payday advance stores: This can be an expensive option. These payday lenders may impose hefty flat fees or percentage fees as high as 10%.
  • Walmart or other big retailers.
  • Grocery stores.
  • Pharmacy chains.
  • Some retailers can load your cash onto a prepaid debit card. These cards, however, can carry monthly fees or withdrawal fees.

How To Write A Voided Check?

A check can be voided or canceled by writing the word "VOID" across the front in the largest and clearest font you can manage, ensuring sure it completely covers the check.  A voided check cannot be deposited or paid. It becomes invalid.

A check can also be voided online. You might be able to log into the account depending on the bank, and if you have the choice to void a check or stop a check payment, choose this option and cancel the relevant check number.

You can contact customer service to cancel it. Before you call, have your account number, check number, and the exact amount on the check ready. If you give the erroneous check number, the incorrect payment may be canceled. 

Remember that if the bank needs to approve a stop payment request, there will be fees, and they will differ between banks. Usually, they cost around $30.

How To Spot A Fake Check?

One of the most prevalent types of fraud is the use of fake checks. You must confirm its validity before cashing it.

Here are some tips to spot a fake check:

  1. Spelling errors, a faded or absent bank logo, or problems in the bank's address—such as a P.O. box or the incorrect ZIP code—are examples of printed errors. These errors would not be present in a real check.
  2. Verify the numbers on the check. If the check number is absent, the transaction is fraudulent. If the routing number is written in shiny ink rather than the matte magnetic ink or if the number is either too short or too long, that might a fake one. If you are unsure, double-check the bank's routing number.
  3. Fake checks frequently have a fragile or ordinary printer paper feel to them. The edges of real checks are frequently rounded or perforated. Checks with smooth edges, which show they were printed rather than torn from a real checkbook, should be avoided.
  4. A forgery is evident if the signature is faded or if it appears to have been photocopied rather than handwritten.
  5. Call the bank immediately if the check is for less than $5,000 or if it arrived unexpectedly in the mail. Fraudsters usually always send less than $5,000 since banks sometimes release lower amounts without first checking the check. Also, letter carriers rarely deliver free money.
  6. If you have any questions or want to see if the check is in the record, contact the issuing bank. It is best not to call any number that is printed on the check. To get the bank's official phone number, visit their website.

Tips For Writing A Check

Here we share some tips for writing a check that will ensure a smooth transfer of funds to your payee:

  1. Your text is made clearer and less likely to be misinterpreted or misspelled when it is printed on the checks. When written by hand, it can occasionally be challenging to read.
  2. Never hand in a blank check. Fill out every field to ensure that you are completely protected.
  3. Make sure to accurately write the information, including the date, recipient's name, and amount.
  4. Get a consistent signature every time.
  5. Keep track of the payment in your checkbook.

In conclusion, while sending money online is the fastest and easiest way of sending money, Online payment is the simplest option. If you must go with the old ways, writing a check is easier than it appears once you get the hang of it. Just be sure to properly fill in the date, amount, and your signature. Remember to include the cents in the fractional form when writing the words version of the amount. 

And if the check is made out to you and you need to cash it, don't forget to endorse it by signing your name on the reverse. Writing or cashing a check will be a piece of cake after you have mastered the techniques.

 63737 views
Rate article:
(0.0)
 
 
Money Transfer FAQ's
Related Articles
Travel Insurance
How to Save on Travel Insurance (2024)

Travel insurance is an essential aspect of trip planning, providing financial protection against unforeseen events such as trip cancellations, medical emergencies, and lost luggage. However, finding the right travel insurance plan at an affordable price can sometimes be challenging. In this comprehensive guide, we'll explore strategies to help you save money on travel insurance without compromising on coverage or quality. Understanding Travel InsuranceBefore diving into ways to save money on travel insurance, it's crucial to understand what travel insurance entails. Travel insurance typically offers coverage for various aspects of your trip, including trip cancellation or interruption, emergency medical expenses, baggage loss or delay, and travel assistance services. By purchasing travel insurance, travelers can mitigate financial risks associated with unforeseen events during their journey.Why Some Plans Cost More Than OthersThe cost of travel insurance can vary depending on several factors, including:Coverage Options: Comprehensive plans that offer extensive coverage for emergency medical events during one’s travels tend to command higher premiums than limited coverage plans, but offer more overall benefits and protection.Destination: Traveling to countries with higher healthcare costs or greater risks of natural disasters may result in higher premiums.Medical Costs: The cost of travel insurance is closely tied to the healthcare expenses in the destination country. Countries with higher medical costs often have correspondingly higher insurance premiums.Trip Duration: Longer trips typically incur higher insurance premiums due to increased exposure to potential risks.Age: Older travelers may face higher premiums due to increased health risks and potential for pre-existing medical conditions.Coverage Limits: Plans with higher coverage limits and lower deductibles may have higher premiums.Add-Ons and Optional Coverage: Additional coverage options such as adventure sports coverage, rental car protection, or cancel for any reason (CFAR) coverage can increase the cost of insurance.Tips for Securing Affordable Travel InsuranceIf you are apprehensive about giving away your money on travel insurance, there are many ways to cut down on the cost of the insurance plan.Here are some tips to save money on your travel insurance plan.Compare PlansConduct thorough research and compare quotes from multiple insurance providers to find the most suitable plan at the best rate.Utilize online comparison tools to evaluate coverage options, premiums, and exclusions across multiple plans. Websites like VisitorsCoverage allow you to compare prices and coverage options from various insurers, allowing you to make an informed decision for your needs.As shown here, comparison sites, like VisitorsCoverage, allow you to compare and contrast various travel insurance plans based on your custom needs. You can customize the plans available to you by specifying your coverage amount, plan features–including COVID-19 coverage and pre-existing conditions coverage–available, and additional coverage options.If you are considering visiting multiple comparison sites, let us save you the hassle. Insurance prices are regulated. This means that the same plan with all conditions remaining constant will not have a lower price at other agents, travel insurance aggregators, the insurance company issuing the plan, or any other source.However, similar plans by different companies may have a price differentiation depending on the customizations you enter, hence it is critical to evaluate inclusions and exclusions in the policies.Only Buy Coverage You NeedDon’t pay for coverage you don’t need. It is vital that you customize your plan to get the most specific coverage for you. Luckily, modern-day comparison tools and insurance providers allow us to do just that. When purchasing your policy, a big money saver can be avoiding purchasing unnecessary add-ons or upgrades that may inflate the cost of your policy. Assess your travel needs and opt for coverage that aligns with your specific requirements.It is important to know what exactly your travel insurance plan entails and what it covers. Make a list of things that you need to be covered depending on the types of trips you will be taking and if there are any specific medical conditions that may need attention.The details are always in the fine print. Don't just look at the premium value, read the policy document for inclusions and exclusions in the plan. In the long term, this will save you money and trouble.However, there is a strong caveat to this. While opting for the cheapest plan may seem cost-effective initially, inadequate coverage could lead to significant expenses in the event of a claim. Should you run into an emergency that is not covered, you will have to pay out of pocket. At the end of the day, the cheaper plan may end up costing a whole lot more. Read policy documents thoroughly to understand coverage details and exclusions before making a decision.Bypass Travel Site OffersWhen booking flights or accommodations, you may encounter offers to purchase travel insurance directly from the booking site. Skip the checkbox for travel insurance on these booking sites. These plans often come with commissions and may not provide tailored coverage. For optimal savings and personalized coverage, opt for a separate plan from reputable insurers.Sometimes, these add-on plans might seem like a good deal. However, keep in mind that, many times, these plans try to be a one size fits all solution. The amount of premium will vary depending on who is buying the plan. For example, an older person traveling with medical issues will pay more premium than a young person traveling with no medical issues. Using a “one size fits all” option may lead to a situation where you have to pay out of pocket in the case of an uncovered medical emergency. Use Your Credit Card Travel InsuranceFor those looking for trip insurance rather than travel medical insurance, there is a great option you may already be accessing without realizing. Some credit cards offer complimentary travel insurance benefits, such as trip cancellation, trip interruption coverage, and baggage delay protection. Cards such as Chase Sapphire Reserve are well known for their comprehensive travel insurance coverage. Review your credit card's terms and conditions to understand the extent of coverage provided and consider leveraging these benefits as a supplement to your travel insurance plan.You could always use travel protection offered by your card as a top-up to another policy that covers the emergency medical expenses. There is no reason to spend extra money on trip insurance when you are getting the benefits as a cardholder.Utilize Review WebsitesExplore review websites and rating platforms to gain insights into the products and services offered by leading travel insurance companies. Reading reviews can help you make informed decisions and ensure you receive excellent customer service.There are several review websites and rating websites such as VisitorInsuranceReviews.com, Trustpilot where you can read in-depth on the products and services offered by leading travel medical insurance companies.It is also important that you have access to excellent customer service from your insurance providers to get the best value for your money. Even if you save a few dollars in insurance costs but face unresponsive customer service for hours on end, the situation gets more costly.VisitorsCoverage is a one-stop shop for travel issuance which also offers an award-winning, industry-leading customer service team. They also offer AI-based customer support for those wanting quick and easy help. You can get in touch with the call team via WhatsApp messages and email. Or call them using their toll-free line number: 1-866-384-9104.Evaluate Optional Riders Such As “Cancel For Any Reason”"Cancel for Any Reason" is an upgrade option that lets you cancel a trip for any reason for 40%-75% of your insured trip costs. This option can help you save a lot of money should you run into a reason your trip is canceled. While these riders offer added flexibility, they also come with additional costs that may not be worthwhile for every traveler. But you have to pay extra to include it in your plan.Insurance companies usually have a list of the covered reasons in “Cancel For Any Reason” trip insurance. These include terrorism, natural calamities, traffic accidents, and more. If it is not listed, it will not be covered.Sift through the list with a fine toothed comb to see which scenarios are covered. Most travelers find their trip cancellation reasons covered. If you don't need the optional "Cancel for any reason", don't add it.Some plans have promotional offers that may include this coverage if you purchased the plan within a certain time frame. Make sure to check for any promotions and offers like this. Consider Annual Multi-Trip PlansFor frequent travelers, annual multi-trip insurance plans offer significant savings compared to single-trip plans. With coverage extending for an entire year, these plans provide convenience and cost-effectiveness for individuals who travel overseas multiple times a year.Avoid Insuring Refundable CostsIf your travel expenses, such as airfare or hotel bookings, are refundable, there's no need to purchase insurance for them. If you insure a refundable cost and try to seek reimbursement in the event of cancellations, you will need to show proof that certain prepaid costs were non-refundable or your claim will be denied. Instead, focus on insuring non-refundable expenses to minimize coverage redundancy and reduce premiums. This will reduce the coverage and lessen the premium of the travel insurance that you plan to purchase. It is cost-effective to know which trips need to be insured and when you don't need a policy in the first place.While the prospect of traveling without insurance can be daunting, finding affordable travel insurance doesn't have to be. By following these practical tips and strategies, you can secure comprehensive coverage without breaking the bank. Remember, investing in travel insurance is an investment in peace of mind, ensuring that you're financially protected against the unexpected twists and turns of travel. Safe travels!Get Quote And Save On Travel Insurance

eseva
Sending Money To Nepal: eSewa International Money Transfer Service

Growth in digital remittances can be a game-changer in international remittances, mainly in terms of reducing the cost of global money transfer, increasing accessibility, and being more customer-centric. In the case of Nepal, which is one of the highest recipients of remittances in the world, youth are leading the mobile and digital revolution in the country. 50% of the users of eSewa, Nepal's most prominent digital wallet, are between the age of 18 to 30 years. With eSewa, users can make various payments such as pay utility bills, pay internal bills, recharge phones, book airline, and bus tickets, scan and pay to merchants, make a bank transfer (from eSewa to a bank account), and so on. There are also cashback and reward points upon registration. Established in the year 2019, eSewa Money Transfer is affiliated with F1Soft Group. With 15 million users (almost half of the country's population), F1Soft has been the leading fintech company in Nepal since 2004. eSewa is licensed by Nepal Rastra Bank under foreign exchange regulation, so it is a safe and highly regulated mode of money transfer. It offers traditional brick-and-mortar and agent-based remittance services along with the non-traditional digital modes of remittance.Money Transfer Services from the U.S. to Nepal with eSewa eSewa is partnered with various leading money transfer companies such as MoneyGram, WorldRemit, Remitly, Skrill Money Transfer, TerraPay, WireBarley, enabling customers from the U.S. to send money to friends and family in Nepal directly into the recipient's bank account or eSewa wallet.The account deposit service is available in more than 65 banks in Nepal. With more than 4.2 million registered eSewa wallet users, the addition of remittance service to eSewa wallet will provide a boost in remittance inflow to Nepal.Remittances to Nepal constitute a major portion of the country's foreign exchange reserve, surpassing both the official development assistance and the total foreign direct investment. In 2019, Nepali migrant workers sent home $8.64 billion which constituted 25.4% of the country's GDP. Sending Large Amount of Money from the U.S. to NepalThe U.S. to Nepal money transfer corridor is a thriving one, with many money transfer operators competing for business. Here are the top 5 money transfer service providers from the U.S. to Nepal.XoomPayPal-owned Xoom, a leading digital money transfer provider is one of the fastest, secure and convenient ways to send money from the U.S. to Nepal. The Xoom mobile app or website allows users in the U.S. to send money in an instant to friends and family in Nepal using their U.S. bank account, debit card, or credit card. Xoom has partnered with major banks in Nepal - Everest Bank Ltd., Nabil Bank, Himalayan Bank, Nepal SBI Bank, and others offering instant bank deposits. The money can be transferred to a bank account or picked up from an agent location (from over 4000 cash pickup locations) in Nepal. The maximum transfer amount is $9,000 per transfer when using Xoom transfer. The transfer fee varies depending on the method. Bank transfers are usually free of cost. Fees for payments by card are percentage-based.Do keep in mind that a margin is added to the exchange rate when converting U.S. dollars (USD) into Nepalese rupees (NPR).Wise (formerly known as TransferWise)Wise (Ex-TransferWise) is a London-based financial technology company regulated by (Financial Conduct Authority) FCA in the UK. For online money transfers from the U.S. to Nepal, Wise is a secure, fast, and low-cost option. There are no hidden charges, no marked-up exchange rate. Wise gives you the interbank exchange rate for your transfers. You can pay by direct debit, bank transfer, debit card, or credit card. Bank debit or ACH is the cheapest followed by bank transfer. While payment via credit cards has more fees. Depending on the transfers, the money can be reached in one day or even within seconds. There are limits to how much you can send to Nepal. For larger transfers, Wise might ask you to provide your ID card. To initiate the transfer process, sign up online or in Wise's app for free.WorldRemitWith WorldRemit, Nepalese immigrants in the U.S. can send money online to recipients in Nepal. The money can be received via cash pickup, bank deposits, mobile money, and even airtime top-up.The cask can be pick-up from thousands of Samsara, NIC Asia, and Citizen Bank locations within minutes. The bank transfer may take 1 business day.You can send up to $5,000 per transfer with bank transfer and up to NPR 300,000 with the cash pick-up option. A maximum amount of NPR 1,000,000 can be sent in a day. The transfer fee will depend on the transfer amount. WorldRemit adds a margin to the exchange rate.Muncha Money TransferMuncha money transfer lets you send money to Nepal from all the 50 states in the U.S. It is a preferred choice for many NRN (Non-resident Nepalese) as an online payment gateway. Muncha Money Money Transfer and ThamelRemit are popular ways of sending money.An individual with a U.S. bank account can transfer money to the recipient's bank account in Nepal. It takes about 48 hours to complete the transfer. It is licensed by Nepal Rastra Bank, so your money is safe and protected. It offers ACH transfer and can send up to $10,000 per transaction from the U.S. to Nepal. The first transaction is free for all customers.ThamelRemitThamelRemit is an online money transfer platform for sending money from the U.S. to Nepal. It is trusted by more than 50,000 Nepalese in the U.S.The platform is supported by Siddhartha Bank Ltd., one of the fast-emerging banks in Nepal, and is powered by MachNet.The transfer is carried out via ACH where money is directly debited in USD from your bank account in the U.S. and transferred to the recipient's bank account in Nepal in NPR. There is no charge or bank processing fee within Kathmandu Valley.Outside Kathmandu Valley, there may be a bank processing fee that is deducted from the recipient's bank account as per the particular bank's rules and regulations.  The exchange rates offered are highly competitive and fees are affordable. You can send up to $10,000 per transaction and get the money deposited into the destination account in 48 hours.TakeawayThanks to the increasing number of users of digital payment platforms like eSewa and others, the cashless transaction is becoming a reality in Nepal.The above list is not an exhaustive list of all the services available to send money from the U.S. to Nepal. It can be difficult to choose one from a plethora of options. Before you make the transfer, compare the money transfer service providers to get the best value for your money while sending money from the U.S. to Nepal.Nepalese living abroad prefer to send remittances directly through mobile banking, internet banking, or digital wallet. It offers ease of use, convenience, lower cost, and a competitive marketplace of the money transfer industry that gives better service and better exchange rates.

hands holding up payday sign
Everything You Need to Know About Paycard

How do you pay your employees? As an employer, paying your employees is an important part of your business. Direct deposit to your employee's bank account or issuing paper checks are two of the most common ways of compensating them. Gone are the days when employees used to get paid in cash.But what happens when some employees have no bank accounts? This is where paycards come in. Paycards for employees are an alternative option when the employees do not own a bank account, and the employers do not want to pay in hard cash.It is estimated that about 5.4% of U.S. households (approximately 7.1 million) were "unbanked" in 2019, according to the U.S. Federal Deposit Insurance Corporation (FDCI). An unbanked household means no one in the household had a checking or savings account at a bank or a credit union.For small businesses with employees with no bank accounts, paycards can be a convenient option as a payment option.Direct deposit and paycards both offer the benefit of a paperless payroll distribution process and allow the employer to electronically transfer funds conveniently. While direct deposit is the norm for many businesses, paycards are gaining popularity each year.There are pros and cons of using paycards, and in this blog, we will discuss if paycards are right for your business and employees.What is a Paycard?Paycard is a lot like a prepaid debit card as it is made of plastic and can be pre-loaded. In the case of a paycard, the money loaded comes from the employer in the form of an employee's pay. The card carries the issuer name such as MasterCard, Visa, or Discover.Are Paycards Good, and Who is it For?A pay card can be used to pay an employee who does not have a bank account. Paycard holders or employees can cash out from paycards at a bank, ATM, or other point-of-service locations.Employees can also pay bills over the phone using their paycard number or authorize electronic bill payments to specified companies.Employees can use paycards at any merchant, grocery store, retail shop, or gas station that accepts debit cards.Do Paycards Have Fees?By law, employees must be able to access their wages in full without any fees. They can obtain the cash at a bank teller, ATMs associated with the card issuer, pay bills by telephone, or use the card for point-of-sale purchases.However, there may be fees for electronic fund transfers or for cash withdrawals at ATMs that are not in the issuer's network. There may be fees for card replacements, balance inquiries, inactivity fees, or other reasons. The Consumer Financial Protection Bureau issued a rule in April 2019 that paycard issuers must disclose all the fees to cardholders.Employees must be informed of the potential fees. The paycard issuer is required to give you disclosures on such fees before you sign up for a paycard or a payroll card.Also, paycards are regulated by state laws, so you might have to check for additional details depending on your state. Some states are making efforts to reduce fees that affect employees.As you can see, paycards fees mostly affect employees. In the case of direct deposits, employers are the ones who have to pay fees for setting up the payroll distribution system and a transaction fee for each time they transfer wages into an employee's account. The payroll software may also charge a fee for their service.Can Employers Save Money When Using Paycards?Since paycards are reloadable cards, employers can have the banks reload the paycards with their employees' wages for the pay period, avoiding the costs and hassle of issuing paper checks, mailing them, or re-issuing lost checks. The savings may not be a substantial amount but they can add up gradually.Can Employers Choose between Direct Deposit and Paycards?While there is no mandate that employers can only offer either direct deposit or paycards to their employees for their wages, it is safe to check with your state's law on payroll distribution.One-third of states allow employers to require employees to have bank accounts for direct deposit. In such a case, paycards may not be needed. Also, there is no law preventing employees with bank accounts to opt for paycards as their payment option.Though generally, employees tend to prefer direct deposit because of its efficiency and the least costly method of payment, as a business owner or an employer, it is better to give options instead of imposing only one method.Ask your employees about their preferred method of payment and what benefits (convenience, low fees, etc.) serve them the best.In fact, Federal law requires employers to offer alternative payment methods like paper checks or direct deposits.Should Employer Provide Pay Stub?Pay stub provides details of the employees' pay for each pay period. Employers are not required by federal law to give employees their pay stubs. However, many states have laws that require some form of written pay statement.Even if your state doesn't need you to provide pay stubs, you are still required by the Fair Labour Standards Act to keep track of your employees' working hours.For employees, a pay stub gives a record of their wages, deductions, contributions, and other information. It is also proof of income or employment, which is often needed when applying for a loan, credit card, or housing.For employers, a pay stub is useful for tax purposes, and it can be used to resolve any discrepancies with employee pay.Is it Possible for Paycards to be Overdrafted?Usually, paycards works like debit card, allowing cardholders to withdraw up to the limit of the loaded amount. However, there are paycard that allows overdraft for employees. But it can come with hefty overdraft fees if employees use funds over the limit in their account. Usually, you should be able to prevent misuse by subscribing to an overdraft protection service.Will Paycard Affect Credit Score?Paycards, like all prepaid cards, do not affect an employee's credit score.What is a Paycard Gets Lost or Stolen?A replacement card can be issued in such cases. The employee needs to notify the employer, and then the employer should immediately notify the card issuer. The employee is not liable for the incident as long as the issue is timely reported. Paycards come with similar protection as that of a prepaid card.The reporting time is determined by the card issuer. If you wait longer to report after learning of the loss and theft, the fraudulent charges may increase. You may have to pay a fee for the replacement card.Pros and Cons of PaycardsProsA win-win situation for unbanked employees and their employers.Green alternative to paper checks.Immediate payment to employees.No hassle of cashing a paycheck.No monthly or maintenance fees.Added security when assessing their funds (paycards require a PIN).Employees can report to the issuer if funds are used unauthorized.Paycards can be reloaded during each payday, saving money on issuing paper checks.Added efficiency for the employer as the employer would not have to physically present or mail paychecks to unbanked employees.ConsEmployees may incur fees for several reasons. Be aware of such potential fees.Employers have certain responsibilities to educate employees about the usage of paycards.Limited range of services and flexibility in managing your funds compared to bank accounts and other prepaid cards.The best paycards programs are easy to set up, have lower fees, quick access to funds, and provide a range of benefits such as cashback and discounts. We have made a list of popular paycards providers for businesses:Wisely Paycard by ADPOnline portal and mobile appCompatible with Apple Pay, Samsung Pay, and Google PayZero cost sign upNo hidden feesNo credit checkNo overdraft feeZero cost direct deposit of pay and other sources of income (including government benefits)Accepted wherever Visa is acceptedKeep track of spending and account balances 24/7 on the appGet cash back at major retailersSurcharge-free ATM withdrawalsFDIC insuredSecurity features include instant card lock, purchase protection, and travel alert notificationsRapid PaycardDirect Deposit onto rapid paycardLoad funds from approved checks with Ingo Money mobile appsNo fee for cashing paycheck24/7 account access with rapid! Access mobile appNo credit checkCan be used at ATMs, merchants worldwide, wherever Debit Mastercard or Visa debit cards are acceptedPay bills and make purchasesBook airline and hotel reservations onlineEarn interest on savings accountGet cash back rewardsFDIC insuredMoney protected with Zero Fraud LiabilityKittrell PaycardNo fees to use (there are fees for certain situations)Fee-free ATM network with MoneyPassWebsite and Kittreall AppGet real-time alerts and push notificationsCash back at point-of-sale terminals2-way texting to manage your card and accountCompatible with Apple Wallet, Google Pay, Samsung PayEasy portability (Get direct deposit of stimulus checks, tax refund, benefits)Freeze or unfreeze card on-demandSkylight PaycardZero sign up feeNo credit checkNo minimum balance Personalized your card with a family photo or unique imageManage money anywhere on Mobile AppDirect deposit your government benefits, tax refundsUse anywhere where Visa Debit & Debit Mastercard are acceptedFDIC insuredZero liability protectionPay bills onlineEarn interest on savings accountEarn cash back with Payback RewardsSend money to or receive money from friends and family with Netspend cardsSet text alerts about transactionsRefer a friend and boost your card balanceSkylight overdraft limit is $100 & 3 times/ monthConclusionOverall, paycards can be convenient and cost-effective for employees and employees when compared to paychecks or for those employees with no bank account. And the paycard fees are becoming more transparent and competitive.While paycards can be challenging at times, especially when you are employed in multiple jobs and have a separate paycard with each employer, your funds are scattered in multiple cards so it becomes difficult to manage your finances. Some may prefer to put all their money in one place, like a checking account.However, if you can't open a bank account, a paycard is a great option to get paid. Read the fine prints before signing up for a paycard and know the potential fees that come with it.

Download the CompareRemit App
Download the CompareRemit App
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.

Get Listed or Advertise

Download Our Free App

Try our faster, enhanced mobile app for a better experience

CompareRemit App