Have you ever been in a situation where a friend or family member has asked you to deposit a check for them? With so many banking regulations and federal laws, you might have been unsure if this was even allowed. If you are wondering if you can do this legally, we can help you. We researched the laws and regulations of financial institutions in detail so that you'll know for sure if it can be done.
You can legally deposit a check for someone else into their account. This is a common and easy process for customers of banks and credit unions to follow.
Now that we know that you can deposit a check for someone else into their account, we'll take a look at what you need to do to make it work. You might also be wondering if you can deposit someone else's check into your account or if there are other methods to get money into another person's bank account. For the answers to these questions, read ahead in this post to see what our research has uncovered.
How To Deposit A Check Into Someone Else's Account
Putting money into another person's account with one of your checks isn't a complicated process. All you'll need is one of their deposit slips and your check. It's that easy!
Fill out your check made out to whoever's account you'll be depositing it into. On the back of the check, you'll want to write "FDO" or "for deposit only." Fill out their deposit slip with the amount you wrote the check out for. Take it into their bank or credit union, and the money will be in their account in no time.
If you don't have one of their deposit slips, you can always use a blank one at the bank. But to do this, you'll need the account number of the person that you are depositing for.
A bank will not give this information out to you, though some will go ahead with the deposit without one if they are familiar with the person that owns the account.
Can You Deposit Someone Else's Check Into Your Account?
We know that you can write a check and place it into someone else's account. But what if you have a check made out to another party and want to deposit it into your account?
There can be several reasons why this could happen. It might be the only legal tender a person has to pay you immediately, or perhaps it's a minor child in your household that doesn't yet have a bank account.
No matter the reason, this is perfectly legal. But it does open up the door for liability. We always advise caution when doing this, and you should never do it for someone other than a close friend that you trust or someone in your household.
If you are going to do this, there are some things you should first know. Being aware of potential consequences and how to avoid them will be of great help to you if you ever find yourself in this situation.
Have The Check Endorsed On The Back
If you have ever cashed a check, you know that you first have to endorse it. This shows the bank that the signature on the check matches the one that is on the bank account. It's much easier to identify and dissuade fraud by having a signature check.
But your signature on a check made out to someone not on your account won't do much good. You will need to have that person sign the back of the check on the endorsement line.
It's recommended that they add the line "pay to the order of (your name here)" below the signature. This shows the bank that both you and the other party are in agreement that the check has been turned over to you.
Know That Banks Have Their Own Rules And Might Not Accept The Check
Before you walk into your bank and try to deposit the check, it pays to inquire first. Even though this practice is legal, some banks have their own rules against it.
There is a risk of an account holder being duped into fraud by accepting a check made out to someone else, and these institutions just don't want the liability.
Call first and get to know your personal bank's rules. This could save you time and frustration.
Consider Other Avenues Of Getting Money From The Person
Rather than risk being turned away by your bank, you might want to consider other ways that the account holder can get money to you. We live in a time where there's an ATM virtually everywhere. And there are also many electronic ways that a person can get money to your account in an instant.
What Other Ways Can I Get Money Into Another Person's Account?
In the digital age, there is a multitude of ways to get money to another person without having to write out a check.
Whether it's personal or business, financial institutions are linking up with verified and secure methods of electronic funds transfers that can get money to a friend, family member, or business in an instant.
Modern Apps Have Made Transferring Money Quick And Easy
In the last several years, apps like Venmo, Apple Pay, and Zelle have grown in popularity. The freedom to leave the checkbook behind means one less way that someone can covertly get your information.
These apps are mostly free to use for personal transfers, and only charge the receiver a small fee for a business transaction.
With so much competition, it might seem overwhelming to decide on which app or service to use. But with a little bit of research, you'll be able to narrow them down to one that fits your needs in no time.
Many consumers use multiple apps so that they can transfer and receive money from a broader network of people.
There Are Still Older Methods Of Sending And Receiving Money That Is Quite Popular
The ability to send money via PayPal has been around since the late 1990s and is still a popular way to send and receive funds from friends or a business.
Social media sites like Facebook have even gotten into the act, with the meta-owned company offering "Facebook Pay" as a quick way to instantly transfer funds to another person.
Every Service On The Market Will Take Time To Verify Your Personal And Banking Information First
No matter which modern method you use to send or receive money electronically, you'll have to sign up for the service. This is free of charge. During the sign-up process, you will be asked to verify your personal information. You will also need to link an open bank account to the service.
Your bank account is verified in a process that involves the transferring agent depositing an amount into your account (generally less than one dollar) within 48 business hours.
You simply enter the deposit amount back into the app, which shows that you have an open account and that you linked the correct one to the service. The deposit they made is then removed and returned to them.
Depositing a check into another person's bank account is legal and easy to do. But depositing a check made out to someone else into your account can be tricky and should be treated with caution.
Multiple apps and services are free to sign up for that will allow you to send and receive money from individuals and businesses.
We hope this post helped answer all of your questions. For additional information, we suggest reading the following posts: