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If your personal injury lawsuit has settled successfully, you’ll soon be given a check. While this means the end of your financial strains caused by the accident, a different strain may arise.
When large checks are deposited, they can lead to certain complications that may not make it as simple as depositing smaller sums. There may be different steps involved and each bank has policies in place for handling larger checks to prevent fraud while ensuring that the funds are available.
What Issues May Arise When Depositing a Large Check?
If you aren’t issued a direct deposit and instead receive a check with a large sum, certain issues can arise. Ultimately, these are the result of safety checks designed to protect you as well as the banking institution. If you have a large check, you may run into one of these problems.
Hold Placed on Your Funds
It is common for holds to temporarily be placed on funds for large checks. This is done to verify the validity of the check, though it may delay your access to this money. It may help to deposit the check by going up to a teller instead of using an ATM or even opening a new account where the funds can be immediately available for a portion of the settlement check.
In some cases, there may be a few days for a holding period, and once the check is validated, it will be available in your account.
Problems Authenticating the Check
Banks must be diligent to prevent fraud, and they may have policies in place regarding cashing settlement checks. The easiest way to move things along is to speak with a teller and have your ID and settlement documentation ready. Your personal injury attorney may also be able to assist by having the issuing party prepare to verify the check once contacted by the bank.
Dispute Over the Settlement Amount or Other Information
Sometimes, the reason an issue arises with settlement checks is either due to the settlement amount or an error with the payee information. Make sure that you carefully review the details on the check before you leave with it. If you find any discrepancies, make sure they are addressed. You can also ask your lawyer to assist with ensuring this is all done correctly.
What to Do When You’re Depositing a Large Settlement Check
Whether you are receiving a lump sum all at once or a structured settlement that pays you portions of your settlement over time, there are steps to take when depositing a large check. These steps will vary depending on where you go to deposit or cash this check.
Go to Your Own Bank
One of the easiest ways to deposit your large settlement check is to visit your bank. You can choose to go up to the teller counter or wait to be seen privately by one of the bankers on staff.
Your account should have enough funds in the event there will be a hold on the funds. You should bring the check, your identification, and any documents from your settlement. The process will first involve depositing the check into your account. The funds will then need to clear, a process that can take a few days. If you need the funds in cash, you’ll need to wait for them to clear through the bank after the holding period and then you can withdraw what you need.
Visit the Issuing Bank
If waiting a few more days for your funds is too much of a strain, you can always visit the issuing bank. This is the bank that issued the check, and it will require that you have valid identification to present at the time.
Visiting the issuing bank tends to be faster, though you will also need to plan to pay any fees imposed for check-cashing services offered. The fees may be nominal enough that it’s worth it to you to cash in your large settlement check using this method.
Use a Check Cashing Store
Whether you don’t have a bank account or you need your funds immediately, it may be in your best interest to cash the check at a designated store. You can then take the steps you need to set up a bank account and start regularly depositing funds.
If you choose to use a check-cashing store, you will need to bring your settlement check and your photo ID. The fees are often much higher than any bank will charge, usually in a percentage that is based on the amount of the check. The check cashing service will verify the check and then you will immediately receive cash.
Why It’s Best to Set Up Banking Before Receiving Your Settlement Check
For some injury victims, it quite literally pays to get the money from the settlement check immediately, fees, and all. However, this is not a long-term solution, and you should set up a bank account once the dust settles, especially if you’re going to be receiving structured settlements.
After using the cash you need right away, stop at a local bank branch and set up a bank account. You can choose to get accounts that earn interest, which will help your money grow. It can be helpful to discuss your funds with a financial planner as well. They can assist with helping you plan for paying off the bills from your injuries and manage your expenses.
Additionally, you can learn about financial planning that further helps you get to your goals. By investing your settlement funds wisely, you can turn this amount into something much larger down the road. If you’re not sure where to start, ask your attorney for guidance to get the support you need.
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