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Occasionally, you might want to deposit a check made out to another person into your bank account. Perhaps your daughter is overseas for a semester when a check for her arrives in the mail. She's running short of funds, so you want to deposit her check and send her the money. Maybe a friend who doesn't have a bank account asks you to cash a check for them.
You can deposit someone else's check into your account if your bank or credit union allows it and you follow the financial institution's rules for making the deposit.
Can I Deposit Someone Else's Check Into My Account?
A check made out to someone else is considered a third-party check. There's no law requiring banks and credit unions to accept third-party checks; each bank can create its own policy. However, many banks do accept third-party checks. Banks that allow you to cash someone else's check can set their own requirements. For example, they may require the original payee to accompany you to the bank so their identity and signature can be authenticated.
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How to Deposit a Check in Someone Else's Name
To deposit another person's check in your account, you must first make sure your financial institution will accept a check made out to someone else. You can call, visit them in person or check their website to find out.
The person to whom a check is made out is the payee. Banks that accept third-party checks typically require the original payee to sign the check over to you. This usually includes:
- Signing the check: The original payee should flip the check over and sign in the section on the back that says "Endorse Check Here," just as they would if depositing the check to their own account. Make sure they sign using the exact payee name on the front of the check.
- Endorsing the check to you: Under their signature, the payee should write "Pay to the order of" and your name. Be sure they write your name exactly as it appears on your bank account.
Clarify the exact steps involved with your bank. Some banks also require the check's original payee to visit the bank with you and provide identification.
Should You Deposit Someone Else's Check?
When depositing a check in someone else's name, follow your bank's procedures carefully. Clarify exactly what you need to do to deposit someone else's check in your account. Making an error could cause the check to be voided.
Also make sure the check is from a trustworthy payor. Depositing a third-party check from someone you don't know can be risky. If the check bounces but you've already used the money from the check to pay bills, your payments may not go through. Your bank may charge you a non-sufficient funds fee, which can be $25 or more. You might have to scramble to get enough money into your checking account to pay your bills on time. If your payments are late as a result, the companies you were paying could impose late fees.
Once a payment is 30 days past due, creditors can report it to credit bureaus. At this point, the late payment will show up on your credit report and can negatively affect your credit score. A late payment on a credit card could also cause your annual percentage rate (APR) to soar if the credit card issuer imposes a penalty rate on customers who miss payments. In some cases, penalty rates can be as high as 29.99%.
It can take up to five days for a check to clear. To be on the safe side, wait five days after depositing a check before you use those funds.
While it's not always possible, it can be easier for you if the other person deposits the check into their own bank account and then transfers money to you. They can use a payment app such as PayPal, Venmo or Zelle, or set up an Automated Clearing House (ACH) transfer through their bank. If the person can't get to the bank to deposit the check in person, see if they can use the bank's mobile app to deposit it.
If the person asking you to cash their check doesn't have a bank account, you can also suggest that they cash the check at a branch of the bank that issued it, use a check-cashing store or visit a retailer that offers check-cashing services.
Checks and Balances
Depositing someone else's check to your bank account may be possible if your bank or credit union permits it, but there are risks involved. Depositing a check that bounces could lead to bank fees. If your other payments fall through due to non-sufficient funds, there could be late fees too.
A bounced check can also have a domino effect, delaying your payments to creditors, which could harm your credit score. Protect yourself by carefully considering the pros and cons before you deposit someone else's check. While you're at it, protect your credit by setting up free credit monitoring from Experian.