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.Know More
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.Learn More
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 >
Checks generally do not have expiration dates, and banks may cash checks even if they were written more than six months in the past. However, banks have the option to honor or dishonor a check more than six months old.Full Answer >
A stale check is one that is presented for payment six months or more past the date on its face. Banks are under no obligation to cash a stale check unless it is a certified check; however, the institution can cash the instrument if it appears to be a payment made in good faith. Each financial institution may have its own policy on whether to pay or decline these checks.Full Answer >
Uncashed checks written from banks in the United States are generally valid for 180 days, unless otherwise noted. However, some banks may choose to honor even older checks at their discretion.Full Answer >