Requirements for Cashing a Third Party Check

Make sure you have what you need to cash a third party check.bank image by Pefkos from Fotolia.com

While cashing a check made out directly to you is a straightforward matter, cashing a third party check is a bit more complicated. In order to cash a check made out to someone else, proper requirements must be met. If those requirements are not in place, a bank might refuse to cash the check.

Bank Account

In order to cash any type of third party check, you must have an account with the bank where you intend to cash it. Banks are not required to cash third party checks, so the best approach is to call your bank and ask about their specific policies, which will save you a lot of wasted time and effort if they refuse to cash the check. Also be aware that the bank will probably only give you cash equal to the available balance in your account. For instance, Citibank will cash third party checks for its customers at any branch, but only up to the available amount in the customer's account. So if you have a third party check for $200, but only $100 in your account, the most you can receive from the teller is $100. A hold will be placed on the remaining funds until the check clears.

In order for you to cash a check made payable to someone else, that person must endorse the check over to you. To do this, your friend or relative should write "Pay to the order of" and your name on the back of the check. When the person to whom the check is made out signs the check, it is important that the signature match the name in "Pay to the order of" line on the front of the check. For example, if the check is made out to John Q. Smith, the endorsement should use the full name instead of "John Smith" or "J. Smith."

After your friend or relative endorses the check to you, you need to sign the back of the check with your own signature. If you are depositing the check, write the words "For deposit only" above the signature line. Otherwise, simply sign your name below your friend or relative's name on the back of the check. Depending on the policies of the bank, you might be required to deposit the check rather than cash it. If you do not have enough in your account to cover the amount of the check, the bank might only give you cash equal to your current balance.

You will need to provide identification at your bank to verify that you are who you say you are. A state issued driver's license or passport are generally adequate forms of identification.