Have you received a huge settlement check in a lawsuit? Are you wondering how to cash it or where to cash it? Let us explain in detail how we can cash out the settlement check.
What is a Settlement Check?
Checks that you receive for the settlement amount from a lawsuit are like unicorns in the financial world. This is not something like the normal, everyday and typical paycheck that you receive. These Checks with your settlement come after legal procedures such as legal settlements, insurance claims, and even class action lawsuits. The actual challenge comes over here to cash out these checks as they are not usual or everyday payout checks.
So the question here is why is it so difficult to cash out these settlement checks? Let’s understand and discuss this in detail. These settlement checks often come with huge sums, such as thousands and millions of dollars. When you visit the bank to cash out these checks even the bank will start questioning just to be sure and for the sake of concern and security measures. These are regular procedures for the bank before accepting a lawsuit check. Sometimes the bank may place a hold on your settlement check or apply an additional security procedure before granting you access to the hard cash.
Not to worry we are here to assist and guide you through the whole procedure so that you can cash out your hard-earned settlement check without breaking your head.
The Best Way to Cash the Settlement Check.
Your Own Bank (The no-barrier option)
So, let’s approach your own bank first. They know you very well, and you know how the bank deals with you since you are already part of the bank. I believe it is the easiest and most convenient way to cash out a settlement check.
- The main reason behind choosing your bank:-
- Since you are already a customer, the bank doesn’t put some extra effort and time into identity verification.
- Very minimal charges and fees or sometimes it won’t be applicable either.
- Quick access to your settlement fund.
- You can choose and proceed with the option, such as cashing out some parts and depositing the remaining amount into your bank account.
In some cases, even your bank puts a hold on settlement checks if they are for a huge amount. This is just a policy for all the banks and some extra security measures to take care of. This is not a long-term hold; until then, verify your lawsuit settlement amount and identity. You will get your funds the moment the bank finds out every detail is genuine and correct.
The Issuing Bank (Straight from the source)
The next best option is to visit the same bank that has issued the settlement check. The name and details of the bank that issued the check are printed right on the check, so find the details, visit the same bank, and ask for assistance instead of running to other banks and providing multiple details or going through multiple questions.
Benefits of this approach
- The bank easily identifies and verifies the check on the spot.
- There might be no waiting or further delay.
- Mostly, you aren’t required to have a bank account with the same bank.
But there is also a consequence: You might get charged a convenience fee since you are not a customer of that particular bank.
Check Cashing Stores(Fast but expensive)
If you need to get the check cashed quickly and you don’t have an issue paying a bit expensive convenience fee then check cashing stores are the best place to look for. These check-cashing stores are like fast food centers of the financial world as they are quick, very convenient, and sometimes not healthiest for your pocket.
Points to note and understand:-
- Each and every check, including settlement checks, can be cashed in check cashing centers.
- They do not need a bank account.
- You will get your money in fractions of minutes.
Now, let’s talk about the consequences of check cashing centers. The major one is charges, which will be between 1% and 12 % of the check amount. For smaller amounts, this looks okay, but if you have a big settlement check, these charges will have a bigger impact on settlement. So, before choosing this option, we suggest taking your time and thinking wisely.
Prepaid Card accounts (For Tech-Savvy)
With the development of the technology in the banking sector now we don’t have to wait in queue or wait for the banking hours to visit and get your check cashed. If you have a prepaid card account which also acts as the bank.
How Prepaid card accounts work:-
- you need to create or sign up for the prepaid card account online.
- Scan the checks using the smartphone camera and deposit them into the account.
- Now you can use the prepaid card to access your money.
These cards are stylish and slick in design, Also these are modern and upgraded technologies in the banking sector which is very helpful for those who get goosebumps with just the thought of standing in line at the bank.
Be Careful About Drawbacks Of Cashing Settlement Checks
There are a few drawbacks and limitations in cashing a settlement check. You should always be aware of the following points, which might have a big impact on settlement:-
- Fees: There is always a fee or convenience charge involved. Everyone wants a piece of your pie, whether it is bank fees, convenience charges, or check-cashing store expenses.
- Holds: If you have a big settlement check, sometimes banks enjoy using these big checks to play the waiting game. Until you clear the checks, your money will be held with the bank for a few days or might be for a few weeks.
- ID Proof requirement: Be ready to share or present your ID card more than the number of college kids flash at the bar. Here, the ID card we are talking about is the Picture ID, which is approved or issued by the government with proof of address and details.
- Scams and Fraud: There might be chances that some non-existing organization or someone tries to offer you minimum and very attractive charges for your checks. We strongly suggest stopping this help or avoiding such a person’s suggestion. There are many legal and good suggestions available out there.
Tips to Cash Your Settlement Check Smoothly
If you want to cash your settlement check without falling into any trap or struggle, please follow the steps mentioned below:-
- Bring valid and right documents: Always present valid documents such as government-issued ID, Address proof, and settlement documents in the proper sequence. Be ready with enough documents to avoid any delay or hold on the check.
- Plan your day wisely: It is strongly suggested that you hit the bank in the early hours and at the start of the week. Avoid days that are mostly paydays and holidays, as these days might be rushed and extra crowded in the bank, which might delay cashing your checks and documentation work.
- Be careful with any approval: Please do not sign or write anything on the check until and unless you are at the counter and ready to cash it. Always remember that a pre-indorsed check is similar to a signed blank check, which is always risky and can put you in trouble.
- Always aware of any hold: Before you hand over the check, please find out about any hold and possible delays related to it. Remember, knowledge is power.
- Think and try to split the huge fund: If you have a huge fund check, always think and try to split it, cashing a portion of the fund and depositing the remaining. This is very similar to portfolio diversification, but it needs less mathematical work.
FAQs About Cashing Settlement Checks
Can I deposit a settlement check via the mobile app?
Sometimes, While many banks have restrictions on mobile deposits, some banks do allow them. You might have to deposit large checks in person. You are advised to consult your bank before taking any action.
What if I don’t have a bank account?
Not to worry as there are many check-cashing stores, Walmart, or prepaid card accounts are the other solid options available. Please consider and think of fees before choosing any of these options.
How long do I have to cash a settlement check?
The Majority of checks are valid for 90 days, but it is advised not to extend them. It is best to act as soon as possible because your check might become expired after 6 months.
Are there any limits on how much I can Cash?
Yes, and it depends on the particular location, such as a check cashing store or Walmart. Sometimes, banks with higher limits also hold huge fund settlement check amounts for security checks.
Receive Your Money With Minimal Difficulty Now
So that we know all about the pros and cons of cashing the settlement checks, there is always an option, whether you are Team Bank, Team Walmart, or Team Tech, with prepaid cards.
Always keep in mind that the best option depends on your current and particular situation. If you need the funds urgently, Including all fees, a check cashing store might be the best option. If you have time, the best option is to contact your bank.
Whatever path you take, always be aware and mindful of fees and charges, confirm you have the necessary and required paperwork, and take your time to understand all details and questions related to your check. In the end, it is all your money, so be careful and cautious.
Now, go ahead and cash the check! Your terms, your rules, and your regulations. One suggestion: Please wait until the checks clear and you get your funds before purchasing anything and committing to any payment-related work.
Where do settlement checks get cashed? You now have the proper and detailed answer with all the possible approaches. So, last but not least, cheers to you for cashing the check.