While most people have established a banking relationship with a financial institution, some people use check cashing business instead. People who use check cashing business often do so for their ability in and around the neighborhoods in which they live.
However, there are many advantages to using a financial institution rather than a check cashing company. First and foremost, it is generally much less expensive to use a deposit account at a financial institution than the services that a check cashing company provides.
For example, Joseph uses a check cashing company to cash his checks. He cashes for checks a month and is charged $5 each time. That means he pays $20 a month (4*$5) or $240 a year ($20*12 months) just to cash his checks. He cannot write checks to pay his rent and utilities since he does not have a checking account at a local financial institution.
Some financial institutions have branch offices around your community. In addition, some financial institutions operate Automated Teller Machine (ATMs) in convenient locations, including grocery stores, shopping malls, movie theaters, and in kiosks on neighborhood streets. ATMs are available 24-hours-a-day; seven-days-a-week.
Example: Antonee cashes his checks by using an account at a financial institution that charges a monthly fee of $5, which includes 8 free checks per month and free use of the ATM. (We’ll talk more about ATM usage and fees in a few.) Additionally, ordering a box of 100 checks costs him about $18, since he purchases his checks through the financial institution. In this case, using a checking account for one year cost Antonee $78 ($5*12 months= $60 + $18= $78). This equals a savings of $162 a year ($240-$78).
