There are times when a check might be made out to you and another person. When they're refunding overpaid insurance or property taxes, mortgage companies make the check out to everyone who is on the loan. You might make a check out to the two young brothers from down the street who mowed your lawn and pulled weeds. How these checks get deposited depends on how they were filled out.
Lucy and/or Ricky
We don't think much about depositing a check made out to ourselves. If we're the only check payee, we just endorse it by signing it on the back and we put it in the ATM, bring it to the bank or take photos of it with our cellphone. But when a check is made out to more than one person, it gets a little more complicated.
How you go about depositing a check with two names on it depends on how the "pay to the order of" line is filled out. If the check is made out to Lucy McGillicuddy and Ricky Ricardo, both Lucy and Ricky have to sign it before it can be deposited. This is also true if an ampersand (&) is used instead of the word "and."
If it's made out to Lucy McGillicuddy or Ricky Ricardo, either Lucy or Ricky can endorse the check and deposit it. If the person who wrote the two-party check made it out to Lucy and/or Ricky, it can be deposited by either payee. It's treated the same as if it were made out to Lucy or Ricky.
Other Scenarios and Joint Accounts
If you're given a two-party check that doesn't fit into any of the above scenarios, it's best to check with the bank before anyone endorses it. For example, a check might be made payable to two people with no words or symbols between their names, just a blank space. Some banks might treat this check as if it read "or." Other banks may treat it as if it read "and."
Everything discussed so far assumes that the two parties have a joint account that they're depositing the check into. If they don't have a joint account they have three options:
- Open a joint account.
- Cash the check and split the cash so that each person can deposit their share into their own individual account.
- Go back to the person who wrote the check and ask them to void it and give each of you a check.
Who Says So?
Nearly everything a bank can or cannot do is determined by banking industry regulators like the Federal Reserve System, Federal Deposit Insurance Corporation and various state agencies. Check endorsement rules and regulations are no exception. Banks have some wiggle room as long as what they're doing is in compliance with their regulators' requirements. When federal and state policies differ, federal prevails.
If you've been given a two-party check made out to you and someone else, it's always a good idea to call ahead and ask what your bank's policy is. The last thing you need is having the check sent back to you when you thought the money was in your account.
Some banks even require that everyone the check is written to be present when the check is deposited. This is so that each payee can show the bank their identification. If your bank has such a policy, they probably require the IDs to be government-issued, like driver's licenses.
Cashing a Two-Party Check
If you want to cash a two-party check, the same rules apply. Who can cash it depends on how it's made out. Whether everyone has to be present to cash it depends on the rules of the place where you're cashing it.
If you don't have an account at a bank or credit union, you'll need to use a check cashing service. Their rules are often the same as banks. They also have regulators they have to answer to.
If you use a check cashing service, try to use one at a large retail store like Walmart. In general, they charge less than free-standing check cashing services.
- Consumer Financial Protection Bureau: I Received a Check Payable to Both My Spouse and Myself. Do Both of Us Have to Sign the Back of the Check?
- Stack Exchange: Can a Check Made out to 2 People Be Deposited Into a Non Joint Account?
- Federal Reserve Bank of San Francisco: Are All Commercial Banks Regulated and Supervised by the Federal Reserve System, or Just Major Commercial Banks?