Which Banks Accept Third-Party Checks?

Most banks accept third-party checks for deposit under certain circumstances but can reject them at the discretion of bank management. Banks typically will not accept third-party checks unless the payee has an account at the bank with a balance sufficient to cover the check’s value. If the bank accepts the check, it may place a hold on the check until it has cleared.

Banks are hesitant to cash third-party checks and often will accept them for deposit only. Third party checks are written by one person or organization and then given to a third person or organization whose name is added to it. Banks will not accept a third-party check unless the original payee endorses it. At the bank’s discretion, it may require any third party to verify or guarantee their endorsements, or for the third party to endorse the check in their presence. Banks have stringent requirements on accepting third-party checks because their is a higher probability of a third-party check not clearing versus a two-party check. When the third party endorses the check in the banks presence, the bank is able to ensure that the endorsement is legitimate. Those needing to deposit third-party checks should inquire with their bank as to the policy on third-party check acceptance and what verifications are required.