According to the IRS website, a large number of the latest batch of direct payments sent last week were mailed as paper checks and EIP cards. How much will it cost you to cash your $ 1,400 paper stimulus check?
There is an under-discussed topic regarding IRS payments that affects many directly: the bank fees charged for cashing the $ 1,400 paper stimulus check.
A survey conducted by the Federal Deposit Insurance Corporation on household use of banking and financial services in 2019, found that 66 million American adults, which means one in five, do not have a Bank account.
Because of this, a family of four that did not receive a direct deposit in an account will lose $ 127 in expenses to collect their paper stimulus check.
The research also shows that an additional 690,000 households have a bank account, but still used check cashing and other high-fee services like prepaid cards.
Check cashing businesses can charge up to almost 2.3%, and experts say that's a real burden for low-income people who are those less likely to have a bank account and are known as the “unbanked” population.
In addition, an investigation by the Brookings Institution estimated that 3 million first-round paper checks issued last year passed through check cashers who collected a total of $ 66 million in fees.
People who do not usually have a bank account are mostly African American and live in the low-income neighborhoods of cities.