FBO means "for the benefit of." When used on a check, FBO refers to a payee other than the one whose name appears first on the "Pay to the order of" line. Payers use FBO when an institution or another party is acting on behalf of the primary payee. FBO is also used in connection with electronic payments.
FBO Mr. Kite
Transfers between retirement accounts commonly use the FBO designation. As an example, suppose Mr. Kite, who has worked at the Acme Gunpowder Company for 15 years, is laid off. Because Mr. Kite has not yet reached age 55, he wants to roll over his company's 401k retirement plan to an individual retirement account, thereby avoiding an immediate tax bill. Accordingly, Mr. Kite requests a trustee-to-trustee transfer, in which the 401k custodian sends the retirement assets directly to the IRA custodian. The Acme pension custodian will make the check or electronic transfer payable to the IRA custodian, FBO Mr. Kite.
FBO is also used when the payee is either a child or in some way unable to handle her own financial affairs. This might occur for a number of reasons, including that the payee is physically or mentally impaired, in prison or out of the country.