Checks are usually made payable to a specific person or organization, but sometimes a single check is made out to multiple names. A check might go to a married couple, several roommates, or to any other group with a shared interest or ownership. A single word on these types of checks dictates how they can be handled. The key is whether the word "and" or "or" appears between each person's name.
“And” means that everybody named on the check must sign. "Or" usually allows only one of the payees to sign.
Everybody named on the payee line must sign for checks that use “and.” For example, both John and Jane should sign a check made payable to "John and Jane Doe."
'And' Checks Can Be Tricky
Banks have to verify the identity of everyone who signs the back of a check, "endorsing" it so it can be cashed or deposited. There's hardly any risk if a check is made payable to two parties and you’re depositing the funds into an account that bears the same two names, but there's a risk that one person will forge the other's signature and run off with the money if somebody wants to cash the check.
Banks might employ specific rules when the names on the check don’t match the names on the account to which it's being deposited.
Does Everyone Need To Sign Together?
Some banks require that all the payees named on a check endorse it together at the same time, in front of a bank employee. Everyone must show valid identification to prove that they’re permitted to endorse that check. Other banks will accept a check when just one of the payees has an account with them.
Banks are especially careful with checks that involve high dollar amounts. One person can often endorse and deposit without the hassle of getting everybody together if it's just for a small amount, such as $5 or $10.
Deposits Are Easier
The process should be simpler if the plan is to deposit the check as opposed to cashing it. That’s especially true when all the payees hold an account together. For example, it might be a joint account for a married couple, and the check is written using those same two names. It might even be possible for one person to deposit the check without both signatures in this case.
'Or' Means Anybody
In most cases, just one party can sign checks made payable to multiple parties using the word "or.” For example, a check made payable to "Jane or Pat Doe" can be signed by either Jane or Pat. Certain situations might require the signatures of all payees, however.
Speak with your bank or ask an attorney in your state how to handle the check if the payment is particularly large, or if it's part of an insurance or legal settlement. It might be wise—or even required—to get everybody's signature on the check even if it says "or."
What If It’s Not Clear?
Some checks don't specify “and” or “or” anywhere. The answer isn't as clear in this case.
As far as the law is concerned, you can often treat the check as if it says “or.” The Uniform Commercial Code (UCC), which sometimes serves as a template for how states and banks handle these transactions, indicates that “ambiguous” checks can be negotiated by anybody named on the check.
Bank Policy Overrides
Your bank doesn’t have to follow the UCC guidelines. Banks can use extra caution with these checks to protect themselves from losses. Some banks have a policy requiring everyone to endorse the check when there’s any doubt about the check writer’s intentions. They might even require that everyone be present to sign in front of a bank employee, preventing you from just mailing it in or depositing it at an ATM.
One option is to try your luck and simply attempt to deposit or cash a check with just one payee's signature. The risk is that the bank will reject your deposit and require that you get the missing signatures before you re-deposit. That process can take several days, weeks, or even longer.
A safer approach is to contact the banks involved (both the bank the check is drawn on, and the one to which you’re depositing it) and ask what they require. Don’t be surprised if you hear conflicting answers from different people—bank policies aren't always clear or well-known.
Talk with somebody who will actually handle the deposit if possible, such as a teller or the branch manager.
You Can Always Try
In some cases, checks will be accepted with a single signature—even when bank policies require multiple signatures—because the missing signatures might go unnoticed. Ultimately, you have to decide what’s best for you. Weigh the alternatives, considering how easy it is to get everyone’s signature and whether you can tolerate delays if the bank wants more signatures.
Writing Checks to Multiple People
Keep in mind that you can make it relatively easy or difficult for the recipients of a check to deposit the funds if you're writing one to more than one person. The right choice depends on what you hope to accomplish, how much you trust the two (or more) people, and other factors like legal and tax issues.
“Or” makes it easy. Using "or" between names allows the most flexibility if you're not worried about one of them secretly pocketing the funds.
“And” keeps everyone informed. It's better to use "and" if you want to be as certain as possible that everybody is aware of the check. This might (or might not) slow things down, but that could be a good thing.
Choose carefully if you're writing a check to newlyweds. One or both spouses might change their last name. Money is always a nice gift, but complications can arise if you write a check out to both of them using "and":
- One of them might change their name, and it will no longer match the name on the check.
- You might assume that one of them is changing their name, but that's not accurate.
In many cases, newlyweds can deposit these checks even if the names don't match up perfectly. Banks see this fairly often. But depositing the funds might require a trip to the branch or a few additional documents and phone calls. Write the check using “or,” or ask the couple how they prefer to receive gifts to make the deposit as easy as possible for them.
Frequently Asked Questions (FAQs)
Where should you endorse a check?
Always endorse a check on the back, above the line that reads something like "Endorse here" or "Do not write below this line." For checks made out to multiple people using "and," include everyone's signature who is included on the "Pay to the order of" line on the front of the check.
Who can endorse a check?
Only those whose names are on the "pay to" line on the check may endorse the back. If you wish to give the check to someone else, you must endorse the back and write "Pay to the order of [First and Last Name]" in the endorsement area.
Can you cash a check made out to two people?
You can cash a check made out to multiple people, but it can be more difficult than depositing it. The bank may require both people to be present and sign in person in order to receive cash.