I received a check from my settlement. What should I do with it?

Avoid check-cashing services! Here’s why:

1. High Fees. Check-cashing services charge you a fee to cash your check, leaving you with less money. 
2. Delay in Receiving Money. By opting to receive a check, you choose a path where you need to wait for a check to arrive in the mail and then cash it. This takes time. Instead, if you elect for an ACH or wire transfer, you can have money in your pocket more quickly. Check-cashing services add an extra step in the process which delays putting money in your pocket.  
3. Risk of Carrying Cash. Carrying cash around can be risky. If you keep your money as cash, you are not protected if your cash gets lost, damaged, or stolen.
4. Upselling Harm. Check cashing services may try to convince customers to accept a payday loan, which can be predatory in nature and leave you with less money than you deserve. 
5. Financial Irresponsibility. Check-cashing services do NOT offer you the perks of a bank, which can include: asset protection and potential investment opportunities.

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Mighty’s recommendation: Open a checking account and deposit your money

1. Protect Money. Holding cash outside of a checking account can be dangerous. You could misplace the money, have it stolen, or have it destroyed by water, fire, etc. Keeping money in a checking account offers you protection.
2. Receive Money Quicker. A checking account enables you to receive money through an ACH or wire transfer. With an ACH or wire transfer, you will be able to access money faster than if a check needs to be mailed to you.
3. Less to Carry. Maintaining a checking account means you do not always have to carry your cash with you. When you establish a checking account, you will be given a debit card. With the debit card, you can access your money whenever you need, without needing to always carry around cash. 
4. Grow Money with Interest. Interest-bearing checking accounts grow your money over time (although slowly). 
5. Potential Access to Loans/Mortgages. Establishing a checking account allows you to build a relationship with the bank, which may help you access a bank’s other offerings, including: savings accounts, investment opportunities, and loans/mortgages. 
6. Demonstrate Intent to Stay in the US. If you are an immigrant, opening a bank account can be a way to establish history and demonstrate intent to stay in the US on an at least quasi-permanent basis. While opening a bank account is not a guarantee of naturalization, having a bank account can serve as an important step in the naturalization process. 

Why should I trust checking accounts?

Safeguards are in place which will protect your money as you interact with banks. 

You do not need to worry about the possibility of a bank closing and you losing your money. The Federal Deposit Insurance Corporation (FDIC) provides protections for your bank accounts. The FDIC covers up to $250,000 per depositor in the event of a bank failure. FDIC protection means you should not let the potential fear of bank failure stand in the way of opening a checking account. 

If distrust in banks stems from a distrust in institutions more broadly, it is worth noting the benefits provided by a bank outweigh the potential concerns with institutions. As will be discussed later on in this article, there are several banks which do not charge the fees often associated with bigger banks. 

Even if you cannot see and feel your money while it is in a checking account, you can rest assured that the protections are in place which require banks to keep your money safe and available to you.

Even people who are undocumented can have a checking account

Even if you are undocumented, you can still have a bank account with some banks. Banks offer protection for your money as well as the ability to establish financial history, which can be important for borrowing money to buy a home or start a business. 

Here is what you may need to open a bank account if you are undocumented:

1. Name and date of birth.

Several documents can be used to prove these:

• Unexpired passport
• Government-issued driver’s license
• Consular ID
• Birth certificate 

     2. Proof of address.

Several documents can be used to establish this, including:

• Lease 
• Utility bill
• Driver’s license or municipal ID (municipal IDs available in cities like Detroit, Chicago, New York City, New Haven, San Francisco, and others)

      3. Identification number. Here are examples of a valid identification number:

• Social security number
• ITIN (individual taxpayer identification number)
• Alien identification card numbers

If you do not have a social security number (SSN), you can still obtain an ITIN (individual taxpayer identification number). ITINs are available to non-citizens who are not eligible for a SSN. Here’s how to get an ITIN:

• Fill out a W-7. The form is available in English and Spanish.
• Attach a federal income tax return OR qualify under an exception to the federal tax filing requirement. A list of acceptable documents to establish proof of identity can be found here.

Here’s how to open a checking account

There are many great banks and banking services locally, nationally, and online. Two great options we like include: SoFi and Chime. Both of these institutions offer protections for your money while not charging you many of the fees which traditional big banks may charge. SoFi and Chime are not the only options out there – plenty of banks and banking services offer options which may work for you! We choose to highlight SoFi and Chime because of their ease of use and minimal fees, but we do not have a relationship with either institution. 

Why choose SoFi or Chime? While both SoFi and Chime offer fee-free accounts where no minimum deposit is required, the offerings between the two differ. SoFi has more offerings and is a better option if you want access to loans or mortgages, but Chime offers a better option if you are looking to build your credit through a secured credit card option.

Additionally, you must be a US citizen or a permanent resident to open an account with Chime. If you are not a US citizen or a permanent resident, you should choose SoFi when deciding between these two options. 

To open an account with SoFi:

1. Head to SoFI. Click “Sign Up” in the upper right hand corner of the page.

      2. Don’t have access to a computer? Head to your local library. They can help you.Head to sofi.com/banking.

      3. Decide if you need an individual account (only for you) or a joint account (for you and someone else, like a spouse).

      4. Follow the instructions to open an account.

Here is the information you will need:

• First and Last Name
• Mailing Address
• Date of Birth
• Social Security Number (or ITIN)
• Employment Status
• Annual Income Number (if employed)

      5. Once your account is open, SoFi offers a mobile deposit service to put money from checks into your account.

      6. If you do not have a smartphone, you can often cash checks at the bank which issued the check. Once you have the cash, you can take the cash and your SoFi debit card to a SoFi partner (including: 7-Eleven, Safeway, Walmart, Walgreens, Dollar General, and Rite Aid) and they will help you deposit cash into your account.

To open an account with Chime:

1. Head to Chime. Click “Get Started” in the upper righthand corner of the page. 

      2. Don’t have access to a computer? Head to your local library. They will help           you.

      3. Follow the instructions to open an account. Here is the information you will           need:

• First and Last Name
• Social Security Number
• Email and a Password

      4. Once your account is open, Chime offers a mobile deposit service to put           money from checks into your account. 

      5. If you do not have a smartphone, you can often cash checks at the bank          which issued the check. Once you have the cash, you can take the cash          and your Chime debit card to a Chime partner (including: 7-Eleven,          Walmart, Walgreens, Rite Aid, Dollar General, and Rite Aid) and they will          help you deposit cash into your account.

Taking money out of your checking account once it’s in is easy

When you open your account, you will be given a debit card. The debit card can be used at stores, allowing you to pay without the need to carry cash at all times. Additionally, the debit card can be used at ATMs if you would like to access cash from your checking account. 

SoFi. SoFi users have access to over 55,000 ATMs through the Allpoint network, which are available at several stores (e.g., CVS, Walgreens, Rite Aid). The SoFi app can be used to find a nearby ATM. 

Chime. Chime has over 60,000 fee-free ATMs at several stores (e.g., Walgreens, 7-Eleven, CVS, and others). The Chime app can be used to find a nearby ATM.

If you've been involved in an accident and are seeking legal support and representation, head to Mighty's Accident Lawyers Directory to find a trusted attorney in your area today.

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