cashing

Cashing is the act of converting a financial instrument, claim, or asset into cash or a cash equivalent. The term is used across banking, investments, consumer finance, and everyday transactions to describe obtaining immediate liquidity. In many cases cashing means receiving physical money, but it can also refer to funds available for immediate use in a bank account or through a payment system.

One common form is cashing a check. To cash a check, a person presents the instrument to a bank, credit union, or check-cashing service. Endorsement, valid government-issued identification, and, in some places, additional verification are typically required. Fees may apply, and some institutions may place a hold on funds until the check clears.

Other instruments can be cashed as well. Savings bonds, government bonds, traveler's checks, and certain gift cards or prepaid cards can be redeemed for cash or a cash equivalent at appropriate issuers or financial institutions. The terms, fees, and redemption values vary by instrument and jurisdiction.

In gambling and some online platforms, a cash-out or cashing out refers to converting potential winnings into actual cash, often through a payout method or withdrawal process. The phrase cashing in can also appear in informal language, meaning to profit from an opportunity or to convert value from one context to another.

Regulatory and risk considerations include identity verification, anti-money laundering controls, and the potential for check fraud or counterfeit instruments. Alternatives to cashing include depositing funds into a bank account or using a debit or credit card for access to funds.

See also: redemption, liquidity, cash flow, check cashing.