Q:

How do you endorse a third-party check?

A:

A third-party check is endorsed with the signature of both the second and third parties. The second party writes instructions on the check in regards to whom is the third party. The second party signs after these instructions. The third party signs the check and can include further instructions. All endorsements must fit within the endorsement field on the check.

The second party includes instructions by writing the words "Pay to the order of" followed by the third party's name. The third party can also include that phrase followed by his bank account information, or he can include any instructions. "For deposit only" is a common instruction to prevent anyone else from cashing the check if it is stolen.

The second party should verify the policy of the check issuer, because some do not allow third-party endorsements. The third party should check with his bank to ensure the bank accepts the check. Third-party endorsements are considered high risk because of the possibility of a forgery. While third-party endorsement is legal, banks choose to accept or reject the checks at their own discretion. The bank may also put the funds on hold for a certain period of time as a precaution. As an alternative option, the second party can cash the check and pay the third party directly.


Is this answer helpful?

Similar Questions

  • Q:

    How do you endorse a check to someone else?

    A:

    To sign a check over to another person, ask the other person's financial institution if it allows this type of endorsement. If it does, sign your name on the back of the check, then write the name of the other person underneath your signature.

    Full Answer >
    Filed Under:
  • Q:

    How do you endorse a check for a minor?

    A:

    In most instances, banks cash checks for minors if their parent holds an account with the bank, providing the parent prints the child's name on the top endorsement line, and the account holder signs the second line. Some banks require printing the account number under the signature, according to BankingQuestions.

    Full Answer >
    Filed Under:
  • Q:

    Which banks accept third-party checks?

    A:

    Most banks accept third-party checks for deposit under certain circumstances but can reject them at the discretion of bank management. Banks typically will not accept third-party checks unless the payee has an account at the bank with a balance sufficient to cover the check's value. If the bank accepts the check, it may place a hold on the check until it has cleared.

    Full Answer >
    Filed Under:
  • Q:

    Where can you cash a two-party check?

    A:

    A two-party check is cashed at the bank where it's from or at check-cashing stores. A two-party check is written to two individuals.

    Full Answer >
    Filed Under:

Explore