Cash vs. Check

Cash Vs. Check

People used to barter to obtain hard goods and services, which could prove inefficient and cumbersome when larger amounts were involved. The invention of coinage, which allowed payment with precious metals, streamlined the payment process. Today, two forms of financial services make trade very efficient: cash and checks.



Cash refers to any paper or coin currency that can buy goods and services. It does not require any special conditions, knowledge or identification to use. Checks are forms printed with account numbers and banking information. You fill these forms with recipient and amount information to assign payment from an account to an individual or business. Check use not only requires a bank account but also a form of identification.


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Large amounts of money are not only cumbersome to store and carry, but if lost, have a low chance of recovery. On the other hand, a check is the same size no matter the amount, and if lost or stolen, can be canceled before payment is required. Its small size also makes it convenient for sending payment by mail or for paying large amounts on the spot.



Because cash is accepted anywhere without any preconditions, it can be used and transferred anonymously. While checks are acceptable in many places, recipients can legally refuse this form of payment. The numbers and identification required by a check can leave a paper trail, offering verifiable proof of payment but making anonymity impossible.



Cash can pose a risk of theft since anyone can steal and use it. A check is more secure since it doesn't require a person to carry large amounts of cash and it requires both a signature and identification for use. Interestingly enough, a check can pose its own security risks. A potential thief can simply copy the account number and routing information from the form and use these numbers to make online purchases.



Float is the period of time between the writing of a check and when it is actually paid off in cash, and can run several days. This allows the check-writer interest-free use of cash until it is desposited in the account, and can prove to be a useful money-management technique. (The full amount does not have to be deposited in the account until the check actually clears.) Cash offers no such advantage.