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Thread: Rules On Depositing Third Party Checks

  1. #1
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    Rules On Depositing Third Party Checks

    I thought that one could deposit an endorsed third party check so long as one had sufficient funds in one's own bank account to cover it until the check is cleared.

    Example -- check payable to X is endorsed (signed on the back) and I then just want to deposit check in my bank account. It doesn't matter to me how long the funds are held.

    I didn't want to wait on the teller line to double check as there was a long line and it wasn't critical for me to deposit the check.

    Does anyone know banking rules.
    Some days I pray for Silence, Some days I pray for Soul,
    Some days I just pray to the God of Sex and Drums and Rock 'N' Roll.

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  2. #2
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    I frequently deposit checks for my son. He endorses, I endorse, I deposit into my account. We have different last names so it isn't evident to the teller that he is my son.
    Democrats are Sexy. Who has ever heard of a good piece of elephant?

  3. #3
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    Quote Originally Posted by tbb113 View Post
    I frequently deposit checks for my son. He endorses, I endorse, I deposit into my account. We have different last names so it isn't evident to the teller that he is my son.
    Thanks -- that's what I thought were the rules but I didn't want to pursue it further at that time since I had other stuff to do.

    I had a feeling that if I actually got up to the teller they would let me deposit the check but I just asked the "hoverer" and I didn't have super faith in his knowledge of procedure.
    Some days I pray for Silence, Some days I pray for Soul,
    Some days I just pray to the God of Sex and Drums and Rock 'N' Roll.

    Meatloaf

  4. #4
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    I do as tbb113. My deposits are made via the atm or mail and have not encountered any problems in making the deposits.

  5. #5
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    I worked at a bank for several years and what you have asked was ok, whether the check was cashed or deposited, as long as you signed under the payee's signature on the back, the check is technically yours at that point.

    That's the whole reason they tell you to never endorse a check until you get to the bank.

    I will add though, banks make up their own rules sometimes. Two examples - first one, my husband and I at one point each had our own personal accounts at two different banks. When we got our tax refund check, which was in both of our names, despite my husband having endorsed it with me, since he wasn't present my bank wouldn't let me deposit it. He took it to his bank, without me, and they deposited it just fine.

    Second example, my husband received one of those loan checks in the mail one time. He was going to use it to pay off something with a higher rate. His bank however, wouldn't deposit it for him!! They told him he'd have to go to that banks office in a town 30 minutes away and have them cash it for him. Their reasoning was they'd had a few customers cash those not realizing they were loans (whatever!!).

    So basically, they can do what they want, make up rules as they go. An above poster touched on something though - if you use your night drop and deposit a few other checks with it, they won't as likely catch it.

  6. #6
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    Thanks -- I had always assumed that an endorsed check had theoretically been signed over to the holder although of course most people won't "cash" a third party check -- but depositing it into a bank account.

    I generally deposit to the bank ATM but since I wasn't completely sure that I was correct in thinking I could deposit the endorsed check, I wanted to use a teller.

    Now when I go to the bank I know that I am "technically" correct in terms of my "right" to deposit a check to my own account if I don't want to withdraw funds in that amount.
    Some days I pray for Silence, Some days I pray for Soul,
    Some days I just pray to the God of Sex and Drums and Rock 'N' Roll.

    Meatloaf

  7. #7
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    I'm curious if there are official "rules" or laws related to this, not exactly as third party, but similar.

    My mother has herself and me on some stock shares that pay dividends. The (tiny) checks are made out to both of us. She endorses then sends them to me for signature and deposit.

    Our local Wachovia branch will not take them because she does not have a Wachovia account (she lives 2000 miles from me and there is no Wachovia in her area anyway). I do have more than adequate balance to cover the checks (they're only in the $8 range)

    They recommended I open a joint account with her.

    I "responded" by depositing them in my credit union account, which had no problem accepting them, but it's a pain because I have to do that by mail.

    Michelle

  8. #8
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    In the past I have had a teller tell me no, then take the very same check and deposit it through the atm machine outside the bank and it got deposited into my account no problem.
    A well rounded person is perfectly pointless. - Carrie

  9. #9
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    Quote Originally Posted by mkc View Post
    I'm curious if there are official "rules" or laws related to this, not exactly as third party, but similar.

    My mother has herself and me on some stock shares that pay dividends. The (tiny) checks are made out to both of us. She endorses then sends them to me for signature and deposit.

    Our local Wachovia branch will not take them because she does not have a Wachovia account (she lives 2000 miles from me and there is no Wachovia in her area anyway). I do have more than adequate balance to cover the checks (they're only in the $8 range)

    They recommended I open a joint account with her.

    I "responded" by depositing them in my credit union account, which had no problem accepting them, but it's a pain because I have to do that by mail.

    Michelle
    Evidently the banks can do what they want. The "hoverer" told me that if the check had been made out to both my father and me, I could deposit it without any issues.
    Some days I pray for Silence, Some days I pray for Soul,
    Some days I just pray to the God of Sex and Drums and Rock 'N' Roll.

    Meatloaf

  10. #10
    That doesn't make sense that they wouldn't accept it. I worked as a teller in college. As long as you had enough funds in your account, you could cash or deposit the check and we held the funds until it cleared. If it didn't clear, the funds were removed from your account along with a fee for depositing or cashing a bad check.

    I do it all the time as well. My daughter and I have different last names. I deposit her checks in my account and turn around and transfer it to her 529.
    Maria

  11. #11
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    Quote Originally Posted by Shugness View Post
    I will add though, banks make up their own rules sometimes.

    * * *

    So basically, they can do what they want, make up rules as they go.
    Quote Originally Posted by mkc View Post
    I'm curious if there are official "rules" or laws related to this, not exactly as third party, but similar.
    Yes, there are laws related to this. Checks are negotiable instruments and governed by Article 3 of the Uniform Commercial Code, some form of which nearly every (or maybe every) state has adopted. Even so, it does seem like banks or financial institutions make up rules as they go along. But yes, technically, the laws in your state would dictate how checks *should* be handled in these scenarios.

  12. #12
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    When I was engaged and in upstate NY back in 2003, my grandma wrote a check to my name AND my now husband's name. We both had an account with Chase, but they would not let either of us deposit it in our account, even if we were both there and signing because she had written AND. If it had been OR, things would have been fine. So we ended up having to open a joint account just to deposit the darn $50 check. The stupid thing is that the minute we deposited it, either of us could have withdrawn the money and ran.

    We are now in Canada, and only have joint accounts, but our bank is so much more reasonable about these things.

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