How Long is a Check Good for? (2021 Guide)

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If you run a small business, it’s likely that at least some of your customers want to pay you by check. In fact, according to research by Fiserv, checks are the second most popular method to pay bills, beaten only by payment on the biller’s website.

Whether you have accepted a check as payment for goods or services, or simply from a friend who owes you money, you must deposit the check in a bank account to receive the money you are owed. Or do you?

In this article, you’ll learn how long a check is good for and how to unlock the value of a check without depositing it in your bank.

What Is a Check?

Let’s start with the basics. According to Investopedia, a check is:

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer. The person or entity writing the check is known as the payer, while the person the check is written to is the payee. The drawee, on the other hand, is the bank on which the check is drawn.

When you deposit a check into your bank account, the money is transferred from the account of the person (or business) who wrote the check.

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What Is the Difference Between Checks and Cash or Electronic Payment?

There are four basic ways for someone to pay you what they owe:

1. Electronic bank transfers

Not everyone can make an electronic bank transfer. To do so, you need an internet connection and an internet banking account.

2. Card payments

Card payments can be made either online or direct, providing the payer has a card and you have a method to accept card payments.

Digital wallets are a hybrid between electronic bank transfers and card payments. These are electronic devices that allow individuals to make electronic payments. Money is deposited in the digital wallet, and this can then be used to pay bills. However, this is not very common. A study by Forrester Consulting in behalf of JPMorgan Chase found only one in four small business accept payment by digital wallet.

3. Cash

Cash is the easiest form of payment. The payer simply gives you the dollar bills for what they owe to you. However, carrying a pocket full of cash comes with a big downside. If your cash is stolen or lost, it is gone forever. This is one reason many people don’t like carrying cash.

4. Checks

Finally, we come to checks. If you lose a check or it is stolen, it can be cancelled. It is also made out to you, so this means it is far more difficult for the finder of a check to cash it. In brief, paying by check is popular because it:

  • Removes the risk of carrying cash
  • Ensures that the payer has paid
  • May act as proof of amount owed if the check cannot be cashed

Should You Accept a Check?

As a method of receiving money you are owed, checks remain an important part of the financial system. They ensure that you get paid, and you don’t have the worry of carrying cash. If the person who owes you money doesn’t have cash or cannot access the internet, and if you don’t have any way of accepting payment by card, then you’ll need to accept payment by check.

By accepting payment by check, small businesses will:

  • Pay lower processing fees than when accepting debit and credit card payments
  • Increase their potential market to those customers who prefer to pay by check
  • Increase business with other businesses that prefer paying suppliers by check

The Disadvantages of Accepting Payment by Check

Just as there are disadvantages of accepting payment by cash, card or electronic transfer, there are disadvantages of being paid by check. Here are the two main ones:

You’ll wait longer to get your cash

When you deposit a check into your account, you won’t have instant access to that money. You will also have to deposit the check, which usually means visiting your bank – and that may take you out of your way.

Then there is the waiting time at the bank – and time is money. Once you add up fuel, parking costs and your time, it can work out expensive to cash a single check.

You may receive a bad check

A check may bounce because the payer has closed the account or doesn’t have enough funds to make good on the check. If this happens, you’ll need to chase the payer for the money. That’s hassle you don’t really want.

Accepting Payment by Check

If you are offered a payment by check and decide to accept, you can reduce the risks by making sure that the following details are correct:

  • The amount, and that the numerical amount and written amount are the same
  • The payer’s name
  • The date the check is written
  • Your name as payee
  • The payer’s signature

What Happens If the Check Is Out of Date?

A major problem for small businesses and individuals is cashing any check they have received. That trip to the bank is a time-consuming annoyance. Often, you will put the check in a drawer with the intention of depositing it when you next visit your bank. Then you forget to pick the check out of the drawer, and it remains undeposited.

If you leave a check too long before depositing, you run the risk of it expiring. Under federal law, when a check is six months old the issuing bank does not have to honor payment, though different states have different requirements. At this age, the check is called ‘stale’.

Although the payer still owes you the money, you now have the problem of chasing up for payment. Then you run into a new issue – the payer may have spent all the cash that they had in their account when they gave you the check.

Depositing checks soon after you receive them is also appreciated by those who pay you by check. According to Bank of America’s 2017 Trends in Consumer Mobility Report, 38% of bill payers are annoyed by delayed checks or checks that are never cashed.

For your peace of mind, your bank balance, and to keep check payers happy, you should always deposit a check swiftly, and certainly within six months.

Should You Cash a Check Instead of Depositing It?

Instead of depositing a check in your bank account, you could choose to cash it. Using a service like that provided by ACE Cash Express means you get the cash immediately (if you cash the check in an ACE Cash Express) or the funds are deposited in your account immediately (if you use their electronic service).

If you need the funds quickly to help with cash flow, or you don’t have a bank account, such a service is ideal for you.

The checks that ACE will cash include:

  • Personal checks
  • Payroll checks
  • Income tax refunds
  • Government checks
  • Insurance settlement checks
  • Money orders

The process to cash a check with ACE is easy, too. Once you have received the check and want to cash it, all you need to do is:

  • Sign the back of the check you wish to cash
  • Provide your photo ID
  • Present the check
  • Receive the cash

It really is that easy. If you cannot get to an ACE Cash Express, you also have the option of cashing the check online using ACE Mobile Loads. Imagine a customer presenting a check to you for goods or services you have provided, and within a couple of minutes the cash in in your account. That’s the power of the ACE Mobile Loads app.

Of course, there is a cost when cashing checks. ACE charges 3%, which is typical of cash checking services. However, you save on time, fuel costs, and the worry of not receiving the money owed to you. When you consider the convenience of a check cashing service, 3% is a small price to pay.

Never Have a Check Go Stale

Accepting payment by check makes sense for small businesses and individuals. A check acts as evidence that someone owes you money and should ensure that you get that money.

However, depositing checks can be a time-consuming and costly chore. You will likely have to go out of your way to visit your bank. When you do deposit a check, the money will not be available until it is cleared.

If you need the cash fast, using a cash checking service like ACE Cash Express makes a lot of sense. If you don’t have a bank account, it could be the best solution to unlock your money. There’s a small fee to do so, but you’ll have peace of mind and so will the writer of the check.