When is it a Good Idea to Pay with a Check? - Articles - Consumers Credit Union (2024)

FAQs

When is it a Good Idea to Pay with a Check? - Articles - Consumers Credit Union? ›

Large Purchases

The most common transactions involving checks are for rent, utilities, taxes and other payments to the government, payments to contractors, gifts to charities, payments for healthcare, and education expenses such as tuition payments. Many people also still use checks instead of cash to give monetary gifts.

Key takeaways. It generally takes about two business days for a check to clear, but this may vary depending on the check amount and the specific bank or credit union's policies. Some checks may clear faster, such as checks issued by the government and certified checks.

One of the main drawbacks of using checks is the processing time. Unlike instant digital payments, checks can take several days to clear. This delay can be inconvenient, especially if you require immediate access to funds.

Advantages of Check Payments:

You can use them to pay bills, make purchases, or transfer funds between accounts. 2.

Many people also still use checks instead of cash to give monetary gifts. It's a more secure form of payment, especially if mailing a card. In addition, it's more convenient for the recipient since they can use a mobile check deposit feature on their smartphone to immediately add the funds to their bank account.

Checks include a large amount of sensitive information that can have serious consequences for your clients. They contain a range of information that could jeopardize their privacy and security, such as account and routing numbers that anyone could duplicate and use for fraudulent activities.

Payment Methods

It takes 10 working days for any cheque lodged to complete the clearing system.

In general, you can expect most checks to clear the day after you deposit them, as long as you make the deposit on a business day and during bank business hours. So if you make a deposit at 1:00 p.m. on a Tuesday, for example, the check should clear by Wednesday.

The Federal Reserve has set baseline rules for check deposits: The first $225 must be available the next business day, while amounts from $226 to $5,525 must be available within two business days after the deposit, and amounts of over $5,525 generally should be accessible on the seventh business day.

What are the benefits of paying with a check? ›

Void the check in the bank register under these circ*mstances: The physical check is ruined. The physical check is not ruined, but is incorrect and needs to be reprinted. For example, if it is written to the wrong vendor or for the wrong amount, or if it is returned by a vendor for a replacement check.

It is more convenient and safer to carry around than cash. It is a negotiable instrument that can be endorsed in favour of a third party. They can be easily traced if lost.

Large Purchases

Certain transactions also require the use of checks. For example, when purchasing a high-value item such as a car or a house, the seller may prefer a check as a form of payment. This is because checks provide a sense of security and verification that cash transactions may lack.

Do NOT write a future date on your check. This is called postdating and it is illegal in many states. There is no guarantee that your check will not be cashed prior to the postdate, and if the funds are not available you may be charged with overdraft fees.

Some reasons why a bank won't cash a check include not having a proper ID, not having an account with that bank, the check is filled out incorrectly, or the check being too old. Ensure you comply with all the required criteria before attempting to deposit a check.

We reserve the right not to pay a cheque that is older than 6 months (from the date written on the front of the cheque). If you have a cheque dated 6 months or more ago it may not clear and you should contact the issuer of that cheque and ask for a replacement.

Personal, business, and payroll checks are good for 6 months (180 days). Some businesses have “void after 90 days” pre-printed on their checks. Most banks will honor those checks for up to 180 days and the pre-printed language is meant to encourage people to deposit or cash a check sooner than later.

As an employee, getting paid in check is better for you as it leaves a transaction trail. But if you prefer to get paid in cash, that's okay as long as your employer pays the right amount of taxes and covers insurance premiums for workers' compensation insurance.