When a check is payable to you, you’re the only person who can do anything with it. You can potentially sign the check over to somebody else (so they can cash it or deposit it), but that practice has several pitfalls. When all goes well, though, another person can use a check that's made out to you.
How to Do It
To sign a check over to another person or to a business, verify that a bank will accept the check. If you get approval, endorse the back of the check by signing it. Some banks require you to write "Pay to the order of [Person's First and Last Name]" under your signature, and others only require the person who is depositing it to sign their name under yours. Next, provide the check to that person so they can deposit or cash the check.
Will the Bank Allow It?
Banks might not be willing to accept checks that have been signed over to a third party (that is, somebody besides the check writer and the original payee). It’s perfectly legal to try, but banks aren’t required to honor your instructions. Banks may have policies against this practice, or they may think that a third-party check is a red flag, so they can refuse to deposit or cash these checks.
Ask before you endorse: If you insist on signing a check over to somebody else, have them check with their bank before you endorse the check.
You don't want to add extra signatures and names to the back of the check (which can create confusion and delays at the next place you try to cash the check). Find out if it’s allowed first, and learn what the requirements are.
Things might go more smoothly if you go to the bank with the person depositing the check so the bank has more confidence that nothing fishy is going on. (Bring ID, of course.)
Banks are essentially giving your money to somebody else when you use this approach. Unfortunately, the risk is often too great for them to accept. When a bank can’t verify your identity or your signature, they just have to take the third party’s word for it.
Signing a check over to somebody is not an ideal solution, and sometimes it’s simply not an option. The strategies here might be slower than endorsing a check to someone else, but at least you can be confident that they’ll work.
If You Have a Bank Account
If you need to pay somebody with money you’ve received by check, try cashing or depositing the check yourself to avoid any hassles. The first $200 of funds will typically be available from a check within one business day (or the first $5,000 if it’s a cashier’s check). There are numerous ways to send money online for free, and those methods might be a lot easier than dancing around bank policies.
If You Don't Have a Bank Account
If you don't have a bank account or any other way to handle checks, consider opening an account. Some types of bank accounts can cost money, but not having an account probably costs you more—in both time and money. There are several ways to get free checking accounts, especially at local credit unions and online banks.
If it’s simply not feasible to open a bank account, you could try a check-cashing service, but those fees are typically quite high. Several retail stores have been known to cash checks for free, especially tax refund checks.
If It's Difficult to Get to Your Bank
If your bank doesn't have a branch or ATM where you are, or it's inconvenient for you to get there, these two solutions might make your life easier:
- Mobile check deposit: Your bank might allow you to take a picture of a check—often until late into the evening for a same-day deposit. Then you can withdraw cash or send money electronically.
- Credit unions: If you're a credit union customer, then you might be able to use branches of other credit unions (assuming they participate in the shared branching network).
If You Want to Pay Without Cash
When your bank doesn’t offer mobile deposit, or you’re looking for an inexpensive solution, prepaid debit cards might meet your needs. Just be wary of high-fee cards; prepaid providers are required to disclose all fees to you before you purchase a card.
If you’re trying to pay without cash because you’re concerned about theft (in the mail, for example), write a check or pay with a money order instead.
Depositing a Check for Somebody Else
If somebody asks you to deposit a check written to them, think carefully before you do so. You are risking your own money and your good standing at the bank if you agree. If the check bounces for any reason, your bank will demand that you replace the funds, even though the check was written to your friend—or by somebody else entirely—and you were just trying to do somebody a favor.
If you deposit a bad check, the funds will eventually be taken from your balance, and your account could go negative (resulting in a chain reaction of problems). You can try to collect funds from your friend, but this is often difficult. Also, never agree to cash a check for a stranger, because it'll likely be a scam.
Don't Get Scammed
How can you lose money by helping somebody? Your bank will often allow you to get cash from a check immediately, or the funds appear in your available balance, making it look like you can spend all of that money if you want to.
Later, your bank actually processes the check and tries to collect money for it. It can take days or weeks for your bank to find out that a check was bogus, so don’t hand over cash unless you really trust the person you're helping.
Unfortunately, if you cash a check for somebody else and the check is bad, your bank will not reimburse you.
You'll have to ask that person—if you can find them—and possibly bring legal action to collect the money.