Cheque cashing fees: Is the convenience worth the price?

 Cashing a cheque at a payday loan centre may seem quick and easy, but the fees you'll be charged for these services can add up.

Let's say you are receiving a monthly cheque for $500 for one year. If you cash your cheques at your bank, you get the full $6,000 over the 12-month period.

However, a cheque-cashing service will charge you an item fee, as well as a percentage of the cheque's value. Continuing with the monthly $500 cheque example, if you have an item fee of $2.40 per cheque and owe a percentage rate of 3.6, altogether you would be paying $243.72 a year to access your funds — quite a dent in your wallet.

Item fees and percentages differ slightly between services, but the averages used here are based on the rates charged by five of Canada's largest cheque-cashing/payday loans businesses.

When you cash your cheque with a teller at your bank, you have a right to access the first $100 immediately, without paying any fees. Any remaining funds will be released after a maximum of four business days. If you are able plan ahead for this, you can avoid spending your money on cheque-cashing services.

Learn more about your rights and responsibilities around cheque hold policies and access to funds at