It is also wise to keep the original check until the hold is fully released and the funds are permanently available in your account, providing a paper trail should any issues arise. Below this signature, you should write "For Deposit Only" followed by the account number of the recipient.
Preventing Third Party Check Bounces: Essential Wells Fargo Tips
Risks and Best Practices Because of the extended hold times, you should exercise caution when spending the anticipated funds immediately. Unlike a standard deposit from your own name, third party transactions require an extra layer of verification to comply with federal regulations and prevent fraud.
These holds are not arbitrary; they are regulatory requirements designed to confirm that the issuing bank has sufficient funds and that the check is not counterfeit. The person or entity whose name is printed on the front of the check—the payee—must sign the back.
Avoid Third Party Check Bounces: Essential Wells Fargo Tips
Additionally, if you have power of attorney or are the authorized signer on the payee's account, you may be able to complete the deposit without them physically present. If the check is government-issued, such as a tax refund or benefit payment, the rules might be slightly more flexible.
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