Why Do You Make a Check Payable to Cash?

Paying with a check sometimes is a better option than paying cash. It is easy to lose cash, which cannot be replaced, and cash also can be stolen. Checks are a much safer form of payment. They are binding documents that can be used as proof of payment for a bill, store purchase or service rendered. The associated checkbook register also serves as a record of where your money is being spent, which is helpful when creating a budget. When filling out a check, it is important to list the individual or company you're remitting payment to in the "Pay To The Order Of" field. There are instances, however, when you might want to make a check payable to cash instead.

Why Do You Make a Check Payable to Cash
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To Access Cash

Writing "Cash" in the payment field on your check is a way to withdraw money that you might want to have on hand. Perhaps you want to give your son or daughter $20 to see a movie with friends, or you'd like have cash on hand to tip your Uber driver. Going into your bank to cash a check also gives you a chance to verify your balance, take care of any other bank business or ask any questions you might have about your account.

To Transfer Funds

Another reason to make a check payable to cash is to move funds from one account to another. For example, if your paycheck is directly deposited in your checking account, but you want to set aside $200 a month for a future vacation, you might want to move that $200 from your checking account to your savings account so you're not tempted to spend it.

To Pay an Unknown Payee

A less common reason to make a check payable to cash is to pay an unknown payee. For example, your sister might recommend a last-minute dog sitter and you aren't sure of that person's full name. If you aren't comfortable asking, or you don't know how to spell the given name, you can just write "Cash" in the payment field.

Associated Risks

When opting to write "Cash" in the "Pay to" field, you are taking a risk. Anyone can take that check to the bank and receive the amount printed on the check, which means if the check is lost or stolen, you're out the money when someone cashes it. One way to make this transaction a little more secure is to draw two diagonal parallel lines on the upper left corner of the check. This lets the bank know the check must be deposited into an account and not cashed over the counter.

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