Question

A client wants to deposit a check payable to him and his daughter. His daughter is not with him, and her name is not on the account, so he can't deposit the check. He becomes upset. What should the client do in this situation?

1) Ask the bank to make an exception and deposit the check
2) Wait for his daughter to be present and then deposit the check
3) Endorse the check and give it to his daughter to deposit
4) Return the check to the issuer

Answer 1

The client should wait for his daughter to be present to endorse the check together, endorse the check and give it to his daughter for deposit if her bank allows, or return the check to the issuer for a more convenient reissue. They cannot usually deposit a check payable to multiple parties if not all parties are present and the other party's name is not on the account.

Step-by-step explanation:

When faced with a check made payable to multiple parties, such as one made out to a client and their daughter, where the daughter is not present and not a co-owner of the account, the client generally cannot deposit the check into their own account due to bank regulations around endorsement. Typically, all parties listed on the check must endorse it before it can be deposited, especially if the check is written using "and" between the names. This indicates that all parties must provide their consent for the check to be deposited or cashed.

The options available for the client in such a situation include:

1. Asking the bank to make an exception and deposit the check, which is unlikely to be granted due to strict endorsement policies.
2. Waiting for his daughter to be present to collectively endorse and then deposit the check. This is the most straightforward method, but requires both parties be present at the bank.
3. Endorsing the check and giving it to his daughter to deposit, provided the daughter has an account with a depository institution where she can deposit checks. However, some banks might still require both parties to be present or have written consent from the non-present party.
4. Returning the check to the issuer to have it reissued in a more convenient form, either in the client's name only, the daughter's name only, or electronically.

It's important for the client to understand the nature of depository institutions and the terms around demand deposits or checkable deposits, as well as the general practices of banking when deciding how to proceed in this situation. The client should also consider the potential need to diversify his banking methods or consult with a financial professional to ensure smooth transactions in the future.