Where to Cash a Third-Party Check

A third-party check is a check made out to one person that is signed over to someone else. If you have one in your hand, you can often cash or deposit it, but not everywhere. Banks set their own rules, check cashing stores charge a fee, and scammers rely on this exact situation to take advantage of people.

This guide covers where you may be able to cash a third-party check, what you will need, what it can cost, and how to protect yourself before you hand over a signature or any money.

Key Takeaways

• A third-party check is made out to someone else. The named person, called the payee, signs the back to pass it to you.
• Banks may say no. Chase notes that depositing a check for someone else is possible if the payee properly endorses it, but rules may vary between banks.
• Check cashing stores charge fees. The fee is set by state law, and a store can refuse to cash a check.
• The safest option is often the simplest. Ask the payee to deposit or cash the check themselves, then pay you.
• Fake checks look real. A bank can credit your deposit, and the check can still turn out to be counterfeit, leaving you responsible.

What Is a Third-Party Check?

Three people are involved in every third-party check. The payer writes the check. The payee is the person named on the "pay to the order of" line. The third party is the person the payee signs the check over to and then tries to cash or deposit.

For example, say your aunt gets a $400 check from an insurance company and signs the back over to you because she wants you to have the money. You are the third party. Your aunt's signature on the back, called an endorsement, lets you present the check.

Not every check can be signed over. Chase notes that checks marked "For deposit into beneficiary's account" or "Non-negotiable" generally can't be endorsed to someone else. Always read the front of the check before you rely on it.

Can You Cash a Third-Party Check?

Sometimes. Chase explains that it is possible to deposit a check for someone else if the payee properly endorses it, but rules may vary between banks. Some banks accept only deposits made by the person named on the check, and others will take an endorsed check with extra steps, such as photo ID or a third-party deposit form.

Because policy differs from one bank to the next, call your bank or visit a branch before you make a trip. Ask three questions: Do you accept third-party checks? What ID do you need from me and from the payee? Will there be a hold on the funds?

Where Can You Cash a Third-Party Check

Use this table to compare your main options. Policies and fees vary by bank, store, and state, so confirm details before you go.

Your Own Bank or Credit Union

This is usually the first place to try. If you have an account, you can ask to deposit the endorsed check, and funds are typically available after the bank's normal hold. Some banks may verify the payee's signature, which can slow things down. Credit unions generally serve members only, so you will need an account there.

Related: Banks that cash checks without an account

A Check Cashing Store

Check cashing stores pay cash on the spot, and you generally do not need an account. The tradeoff is cost. Fees are regulated at the state level, and the store decides whether to accept your check. Oregon's regulator notes that a check casher has the right to determine if it will cash your check. Ask for the total fee before you hand over the check.

Mobile Deposit or an ATM

Some banks let you deposit an endorsed check through their app or an ATM, while others restrict third-party checks to a branch. Check your bank's mobile deposit terms before you try. If a deposit is rejected, you may be asked to bring the check into a branch.

Related: How long does a mobile deposit take?

Through the Payee

If the payee can deposit or cash the check, this removes most of the risk. They endorse it and deposit it into their own account, then send you the money. It also avoids third-party endorsement rules entirely.

How to Endorse a Third Party Check to Someone Else

If you are the payee and you are endorsing a third-party check to someone else, take these steps carefully.

1. Confirm the check can be endorsed. Look for "Non-negotiable" or "For deposit into beneficiary's account" on the front. If either appears, the check generally can't be signed over.
2. Agree on the plan. Chase notes that the person the check is made out to must give explicit permission for someone else to deposit it.
3. Endorse the back. The payee signs exactly as the name appears on the front. Many banks also ask for "Pay to the order of" followed by the new person's name, so ask the bank what it wants to see.
4. Sign at the bank if possible. If an endorsed check is lost, someone else could cash it. Signing in front of a teller reduces that risk.
5. Consider restricting the endorsement. Chase notes that adding "For deposit only" and an account number limits the check to that account.
6. Bring ID and any form the bank requires. The bank may ask for a government-issued photo ID and a third-party deposit form.

Requirements for Cashing a Third-Party Check

• Valid form of identification. A driver's license, state ID card, or another government-issued photo ID is the most common requirement.
• The endorsed check. The back should be signed by the payee, with any extra wording the bank requires.
• An account, in most cases. Banks and credit unions generally require you to be a customer. A check cashing store usually does not.
• The payee's ID, in some cases. Some banks ask for it so they can verify the endorsement.

Related: How to cash a check without ID

How Much Does It Cost to Cash a Third-Party Check?

Banks and credit unions may not charge a fee for deposits, but you should ask. Check cashing stores do charge, and the limits depend on your state.

Here are two examples of how state rules work. In Oregon, licensed check cashers can charge up to 2% of the face value of a government check, up to 3% for checks cashed outside the issuing jurisdiction, and up to 10% for other checks such as personal checks. No licensed check casher in Oregon can charge more than $100 to cash a check. In Maryland, licensed check cashers may charge up to 10% of a personal check or $5, and up to 2% of a government check or $3.

As an illustration, a $500 personal check cashed at a store charging 10% would cost $50, leaving you with $450. Your state's limits and the store's posted fees will differ, so ask for the exact amount before you agree.

Licensed check cashers are required to post their fees. Always get a receipt, and verify the business holds a license with your state's financial regulator.

Cashing vs. Depositing a Third-Party Check

Cashing a check means you receive money right away, usually in cash. Depositing means the money goes into your account and becomes available after the bank's hold.

Under general funds availability rules, the bank usually makes a portion of a check deposit available the next business day and the rest generally the second business day. According to BankAnswers, a bank has the right to extend the hold in some cases, including when it has reasonable cause to doubt the check will be paid, when the account is new or repeatedly overdrawn, or when deposits for the day are large. Review your deposit account agreement for your bank's specific policy.

Third-Party Checks and Fraud: What to Watch For

Third-party checks are a common tool in check scams. The FTC explains the pattern: a scammer sends a check, the victim deposits it and sends part of the money back, and the bank credits the deposit. Later, the check is found to be fake. By law, the FTC says the consumer is responsible for the deposited check even if they did not know it was fake, and money that was wired can't be retrieved.

Warning signs include:

• A buyer who sends a check for more than the price and asks you to send back the difference
• Pressure to send money by wire transfer or gift card
• Pressure to act now
• A check tied to a prize, lottery, or unexpected windfall
• An unfamiliar escrow or payment service you can't verify

Funds appearing in your account does not mean the check has cleared. Do not send money to anyone, or spend the funds, until your bank confirms the check has cleared. If something feels off, walk away and talk to your bank.

What to Do If You Can't Cash the Check

• Ask the payee to deposit it. They can then pay you through a method you both trust.
• Ask the payer to reissue the check. A new check made out to the right person avoids the problem.
• Try a different bank or a licensed check casher. Policies and fees differ, so compare before you commit.
• Look at your timeline. If the issue is a short wait for funds, a hold may clear in a day or two.

If you need money for an unexpected expense while you sort this out, compare all of your options first, including waiting for a hold to clear.

A check you can't cash right away can leave you short when a bill is due. If you are weighing your options, Simple Fast Loans offers online installment loans with fixed, scheduled payments. Loan amounts, terms, and availability vary by state, and you can review your loan amount, monthly payment, and repayment schedule before you accept. To learn more first, read how personal loans work.

A loan is not the right choice for every situation. Compare the total cost with the other options in this guide, and borrow only what fits your budget. When you are ready, you can apply online in about two minutes.

Related Frequently Asked Questions (FAQs) About Cashing a Third-Party Check

Here are other questions people often ask about cashing third-party checks:

Can I cash a third-party check at my bank?

Maybe. Some banks have restrictions, and some accept third-party checks only when the payee endorses them properly. Chase notes that rules may vary between banks, so ask yours before you go.

Can I cash a third-party check without a bank account?

A check cashing store is the most common option. The store decides whether to accept the check and charges a fee set by state law.

What ID do I need?

A government-issued photo ID is the most common requirement. Some banks may also ask for the payee's ID or a third-party deposit form.

How much will a check cashing store charge?

It depends on your state and the type of check. In Oregon, for example, fees can be up to 2% for government checks and up to 10% for other checks, with a $100 maximum per check. Ask for the total fee before you agree.

Can a check cashing store refuse my check?

Yes. Oregon's regulator notes that a check casher has the right to decide whether it will cash your check.

What happens if an endorsed check is lost?

Someone else could cash it. Chase suggests that the payee add "For deposit only" and an account number to restrict the check to that account.

How long until deposited funds are available?

Under general rules, part of a deposit is usually available the next business day and the rest generally the second business day, though banks can extend the hold in certain cases.

Sources

• Chase, Can you deposit a check for someone else?

• BankAnswers.gov, I deposited a check. When will my funds be available?

• Federal Trade Commission, Giving the Bounce to Counterfeit Check Scams

• Oregon Division of Financial Regulation, Check Cashing: Consumer Information

• Maryland Office of Financial Regulation, Check Cashers

Note: The content provided in this article is for informational purposes only. Contact your financial advisor regarding your specific financial situation.