How to Cash Large Checks

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Banks don't place restrictions on how large of a check you can cash. However, it's helpful to call ahead to ensure the bank will have enough cash on hand to endorse it. In addition, banks are required to report transactions over $10,000 to the Internal Revenue Service.


Call Ahead

You have the right to withdraw any amount of cash from your bank account. However, the Federal Reserve allows banks to put a hold on especially large checks and deposits. According to the Regulation CC, banks must make the first $200 of a check available to customers by the next day, but are allowed a reasonable amount of time to make the rest of the funds available. Depending on the size of the check, the type of check and the bank policies, this could be a few days or even a week. If you plan on cashing a check of $5,000 or more, contact your bank first. If you let the bank know ahead of time, there's a better chance it will have enough cash on hand to endorse the check. To avoid paying fees, cash your check at a bank with which you hold an account.


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If You Don't Have a Bank Account

If you don't have a bank account and you need to cash a large check, you may have to pay a fee. For large checks, these fees can add up. Check-cashing stores often charge a flat fee plus a percentage of the amount of the check. Another option is to cash the check at the bank of the person who issued it. It may not charge a fee at all and if it does, the fee will most likely be smaller than at check-cashing stores. You can also sign up for a bank account at the bank to avoid the fee. Banks and credit unions can require you to verify your identity before endorsing a check.


Be Prepared For a Report

Although you have every right to cash a large check, be aware that the bank may report it to the IRS. In order to help the government identify and stop criminal activities, banks are required to report all cash movements over $10,000. You as an individual do not have any reporting requirements, other than to report any income honestly and accurately on your tax return.


Note the Date

As long as your check was recently issued and you call ahead, you shouldn't run into any issues cashing the check. However, the situation is different for older, large checks. Under the Uniform Commercial Code, banks are not obligated to cash checks that are more than six months old. Banks often choose to honor old checks anyway but tend to be more leery of large checks. If you have an old check, call ahead to the bank and contact the payee to ensure he can cover the amount.