How to Properly Cash a Check With Two Names
Navigate the complexities of cashing or depositing checks made out to multiple payees. Get clear steps for a hassle-free process.
Receiving a check made out to two individuals can sometimes present questions regarding the proper process for cashing or depositing the funds. There are clear, established procedures that financial institutions follow to ensure such transactions are handled correctly. Understanding these steps can help avoid delays and ensure a smooth experience when managing these types of payments.
Understanding Payee Designations and Endorsement
The wording on the “Pay to the Order of” line is important when dealing with checks made out to more than one person. A key distinction lies between checks payable to “Name A AND Name B” versus “Name A OR Name B.” If the check uses “AND” between the names, both individuals must endorse the check. This means both parties need to sign the back of the check, exactly as their names appear on the front.
Conversely, if the check uses “OR” between the names, either named payee can endorse and deposit or cash the check individually. This offers more flexibility, as only one signature is required. Regardless of the “and” or “or” designation, proper endorsement involves signing within the designated endorsement area on the back of the check, typically the top 1.5 inches from the trailing edge. Correctly endorsing the check is the initial step before attempting any transaction.
Required Identification and Account Considerations
When presenting a check with multiple payees, financial institutions require valid identification from the individual(s) present. A government-issued photo ID, such as a driver’s license or passport, is needed to verify identity. Some banks may also request secondary forms of identification, though this varies. All individuals endorsing an “AND” check and present at the bank will need to show their identification.
The type of bank account into which the check is being deposited also influences the process. Depositing into a joint account where both payees are account holders is the most straightforward method, as the bank already recognizes both individuals. If depositing an “AND” check into an individual account, banks frequently require both payees to be physically present and present their identification, even if they are not both account holders. Bank policies can vary significantly, so it is advisable to confirm specific requirements with your financial institution beforehand.
Steps to Cash or Deposit the Check
Once the check is properly endorsed and all necessary identification is ready, there are several avenues to cash or deposit the funds. The most common approach is to visit your own bank. If depositing into a joint account, one payee may sometimes be able to deposit the check, particularly if it is an “OR” check, but for “AND” checks, both payees are usually required to be present with their identification. Some banks may also allow mobile deposit for checks with multiple payees, especially if depositing into a joint account, though this can depend on the bank’s specific mobile deposit policies and the check’s wording.
Another option is to go to the bank that issued the check. Even if you do not have an account at the issuing bank, they may cash the check for a fee, provided all payees are present with valid identification and the check is properly endorsed.
Alternatively, check cashing services charge a fee, often a percentage of the check’s value, which can range from 1% to 5% or more. These services also have strict identification requirements and may require all payees to be present for “AND” checks. While they offer convenience for immediate cash, the associated fees can reduce the total amount received.
Addressing Common Challenges
If one of the payees on an “AND” check is unavailable to endorse the check or be present at the bank, an agent with Power of Attorney (POA) may endorse the check on their behalf, provided the POA document is accepted by the financial institution. Banks often have specific procedures for handling POA situations, and they may require reviewing the document before proceeding.
For large check amounts, financial institutions may implement additional verification steps or place temporary holds on the funds. This means the full amount may not be immediately available for withdrawal. Funds from larger checks might be subject to holds ranging from a few business days to over a week, depending on the bank’s policy and the check’s origin. Inquire about potential holds for substantial checks to plan accordingly.