What to Do When You Receive a Large Check (And How to Deposit It Safely)
Depositing a large check isn't always easy, as banks have different deposit policies. Here's how to make the process go smoothly.
You sold a second home, earned a sizable year-end bonus or received an inheritance. The check arrives, and it's equal parts exciting and overwhelming.
You think of all the ways you plan to use that check, but first you have to deposit it. And this is where you might run into challenges.
To make what could be a frustrating situation less stressful, I am going to show you some obstacles you could encounter and ways to work around them when depositing a substantial check.
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Depositing a large check isn't easy
Banks want to protect themselves from scammers. So they impose mobile and other deposit restrictions.
That's why each bank has its own policy for larger check deposits. In general, if your check is over $10,000, a mobile deposit might not work. If you don't have a branch nearby, what do you do?
Thankfully, it's not hopeless. First, contact your bank. Explain your situation and see what options are available. They might suggest overnighting the check. Use certified mail to track your package and ensure it arrives.
Credit union members might have access to partner branches. This means you can visit a participating branch to conduct transactions. However, I recommend calling that partner branch in advance and explaining your situation to ensure they can help.
You could also contact the check issuer and request an electronic payment instead. You might have to pay a stop-payment or wire transfer fee, but this guarantees you receive the money without jumping through any hoops.
And when you receive the money, here's a smart strategy.
Grow your wealth while planning for the future
Receiving a large deposit is exhilarating until you have to determine what to do with it. That's why I recommend opening a savings account or storing it in a short-term certificate of deposit while figuring out next steps.
The goal is to separate your large deposit from the rest of your cash flow so it can earn interest while serving as a springboard for building wealth.
Sean Jackson
If you need cash access, a high-yield savings account will be your best bet. Look for online banks since they offer higher APYs with no monthly fees. Newtek Bank is our top choice at the time of this writing, offering a 4.20% APY.
The other thing to keep in mind is that high-yield savings accounts have variable interest rates. If the Fed issues another rate hike, you could receive an even higher APY.
Alternatively, a certificate of deposit is perfect for storing money away for a few months and not touching it. Some CDs offer higher APYs than high-yield savings accounts, giving you a better way to grow your deposit.
Use this Bankrate tool to find the best option for your goals:
Remember, if you need to break a CD term, you'll incur early termination fees. So, if you're on the fence about cash flow, use a high-yield savings account for a few months until you have a plan in place.
Ultimately, depositing a large check can be challenging, but it's doable. Contact your bank to learn more about their deposit policies. Once your deposit goes through, buy yourself time with a short-term CD or high-yield savings account, where your money grows even more as you plan for next steps.
Speaking of planning, if you come into a lot of cash and need help with next steps, consider a reputable financial adviser or personal banker. They can work with you to establish goals that help you build wealth, pay off debt and plan for any tax implications.
If you don't have an adviser, use this Bankrate tool to find a reputable one:
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