You can cash a settlement check at your own bank or credit union, at the bank named on the front of the check, or at a retailer like Walmart that handles pre-printed checks. Your own bank is almost always the cheapest and simplest option, but settlement amounts are often large enough that the money will sit on hold for several business days before you can spend it. Where you go depends on how big the check is, whether you have an account, and how quickly you need the cash in hand.
Before You Go: Endorsements and ID
Look at the payee line on the front of the check first. Settlement checks are often made out to two names joined by “and” — typically you and your attorney. When a check is written that way, both named payees have to sign the back before any bank will cash or deposit it.1Consumer Financial Protection Bureau. Do Both My Spouse and I Have to Sign the Back of a Check Made Out to Us? In many personal injury cases, the insurer sends the settlement to your attorney first. The attorney deposits it into a trust account, takes out legal fees and case costs, and then writes you a separate check from that trust account for your share. If your check came through that route, your name will be the only one on it and you are the sole endorser.
Bring a government-issued photo ID: a driver’s license, passport, or permanent resident card. If you are not a customer of the bank you walk into, expect to be asked for a second form of identification, such as a Social Security card, utility bill, or recent pay stub.2FDIC. Services Provided to Non-Customers
Wait to sign the back of the check until you are actually standing at the counter. Once endorsed, the check becomes payable to anyone holding it.
Your Own Bank or Credit Union
Depositing into your existing account is usually the simplest route. The bank already has your identity on file, there is no fee, and the branch staff is accustomed to handling larger checks. What they generally will not do is hand you the full amount in cash on the spot. For a check the size of most settlements, the bank will want to deposit the funds and run them through the clearinghouse before releasing them.
Credit unions follow the same federal availability rules as banks but may add their own policies for large or out-of-state items, so ask about the specific hold before you deposit.
The Bank Printed on the Check
The bank named on the front of the check — usually the insurance company’s bank — can verify funds immediately and pay you directly. This is often the best choice if you do not have an account of your own, because that bank can confirm the check is good right there at the counter.
Non-customers should expect a fee. Major national banks typically charge between $8 and $10 to cash a check for someone who does not hold an account. For large settlements, especially those over $5,000 or $10,000, the branch may not have that much cash on hand. In that case, the bank can issue a cashier’s check for the balance or schedule an appointment for a cash withdrawal on another day.
Retailers Like Walmart
Several retailers cash insurance settlement checks for a flat fee that is often cheaper than a bank’s non-customer charge. The trade-off is a low ceiling on the check amount.
- Walmart cashes pre-printed checks up to $5,000, or up to $7,500 from January through April. The maximum fee is $4 for checks up to $1,000 and $8 for checks between $1,000 and $5,000.3Walmart. Check Cashing
- Grocery chains such as Kroger cash insurance settlement checks up to $5,000 for cardholders, with fees generally running $3 to $5.50.
Dedicated check-cashing storefronts will often take larger checks, but they charge significantly more. Fees run from about 1.5% to 10% of the check amount depending on the state and the size of the check, and these businesses require pre-printed checks they can verify with the issuing bank. Handwritten checks from a small law firm may be rejected outright. On a $25,000 settlement, even a 3% fee is $750, which is worth weighing against a free deposit at your own bank and a short hold.
Mobile Deposit
Most banks let you deposit checks with your phone camera, but daily mobile deposit limits at major banks typically fall between $1,000 and $5,000, with lower caps for newer accounts. Some banks also refuse certain insurance and settlement checks through the mobile channel based on internal rules. If your settlement is small enough to fit under your bank’s limit, mobile deposit saves you a trip. For anything larger, plan to visit the branch.
How Long Before You Can Use the Money
When you deposit a settlement check instead of cashing it, your bank will almost certainly hold some or all of the funds for a few business days. Federal rules under Regulation CC set the maximum timelines.
The first $275 of any check deposit must be available by the next business day.4Consumer Financial Protection Bureau. Availability of Funds and Collection of Checks (Regulation CC) Threshold Adjustments For the rest, local checks must be available by the second business day after deposit, and nonlocal checks can be held up to the fifth business day.5eCFR. 12 CFR 229.12 – Availability Schedule
Settlement checks usually trigger longer holds. If your deposit exceeds $6,725, the bank can apply a “large deposit” exception that adds up to five or six additional business days beyond the normal schedule.4Consumer Financial Protection Bureau. Availability of Funds and Collection of Checks (Regulation CC) Threshold Adjustments Most settlement checks cross that threshold.
If your account has been open fewer than 30 days, the bank can hold check deposits for up to nine business days on amounts over $6,725, and for certain check types in new accounts there is no maximum hold at all under federal rules.6eCFR. 12 CFR Part 229 – Availability of Funds and Collection of Checks (Regulation CC) If you opened an account specifically to deposit a settlement, be ready for a long wait.
The bank can also extend a hold if it has reasonable cause to doubt the check will clear. When it does, it must give you written notice explaining why.
Withdrawing More Than $10,000 in Cash
If you pull $10,000 or more in cash out of your settlement deposit, the bank is required to file a Currency Transaction Report with the federal government.7FinCEN. A CTR Reference Guide This is routine paperwork, not an accusation. The teller will ask for your Social Security number and verify your ID as part of the report.
Do not try to dodge the report by splitting the withdrawal into smaller amounts across multiple visits or multiple days. That practice is called “structuring” and it is a federal crime, carrying up to five years in prison and a fine of up to $250,000.7FinCEN. A CTR Reference Guide If you need a large amount of cash, take it in one trip and let the bank file the paperwork.
Cash It Before It Expires
Settlement checks have a shelf life. Most are valid for 90 to 180 days from the issue date, and many carry a “void after” date on the face. Under the Uniform Commercial Code, a bank is not obligated to honor a check presented more than six months after its date.8Legal Information Institute. UCC 4-404 – Bank Not Obliged to Pay Check More Than Six Months Old
If a settlement check expires before you cash it, you will need to contact the insurance company or your attorney for a replacement. The insurer may need to stop payment on the original before cutting a new one, which can take days or weeks, and if the claim file has already been closed there may be extra paperwork to reopen it. The simplest course is to cash or deposit the check soon after you receive it.