"For Deposit Only" check / Banking Question

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Fiery Sword

Fiery Sword

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A guy who I do a bunch of side-work for just handed me a check I've been beating him up for for weeks now. In the "Memo" portion of the check, he wrote "For Deposit Only". Does anyone know what this means?

I've had trouble with this guy bouncing checks on me before and I'm not sure if this is just a stall tactic to prevent me from going and cashing his check - which is what I've been doing with him since I lost my trust in his financial stability. Is he just trying to buy a few days before this check will clear? Will I get rejected if I try to cash it at his bank?

thanks for any insight.
 
I'm not sure how it works if the check writer puts it on there like that. If you, the receiver, put that on the check as part of your endorsement, then the check should only be accepted for deposit. Furthermore, if you add your account number to the endorsement, it should only be allowed for deposit into that particular account. Sounds to me like you need to stop taking checks from this individual. :D
 
trinitone said:
I'm not sure how it works if the check writer puts it on there like that. If you, the receiver, put that on the check as part of your endorsement, then the check should only be accepted for deposit. Furthermore, if you add your account number to the endorsement, it should only be allowed for deposit into that particular account. Sounds to me like you need to stop taking checks from this individual. :D
Click to expand...
That all makes sense to me, I've just never hear of it being written like a memo or with the person's signature. I'll play dumb at the bank just to see what happens.

And yes, I shouldn't accept checks from him. Problem is, I always end up getting sucked into doing more work for him. I also always end up getting the money from him somehow, but it is always a freaking hastle. Damn small business owners!!!:D
 
If it is in the memo portion on the front of the check, I doubt any bank would pay attention to it. I've seen several cases where people have put "paid in full" on a short check & the courts say nope, ain't binding.
 
I've put that phrase on the endorsement portion when I'm depositing into an ATM in a sketchy area. One time I tried to cash a check where I had written it and the cashier refused to allow me to cash it out.
 
The Memo is binding to the person in the payee line. If it says "paid in full", and you cash the cheque, then it technically means that you agree with the fact that it says paid in full. But that's neither here nor there, because it would cost you an arm and a leg in legal fees to resolve.
The bank may very well refuse to cash it because of the memo, but it would depend on the teller.
You're best bet is to deposit the cheque into your account (as long as the name in the payee line is the same as on the account).
The only way the guy would have been buying himself extra time is if the account you would be depositing into is different from his account.
 
Just to cap off this story, I went to (his) bank this morning and presented the question to the teller. She was really nice and was kind of intrigued herself. This was probably voilating some kind of protocol but after typing away for a second she said that there is insufficient money in his account to cash the check, but there are two pretty large pending deposits that would cover the check once they cleared. So, having a reasonable confidence that the check would clear I went over to my bank and deposited it like usual.

She added that writing "For Deposit Only" on the check technically does mean they should not cash the check, but if there were sufficient funds and the Payee was correctly identifiable then she would do it.

......Startup architects are worse than teenagers in the mall when it comes to money....
 
Fiery Sword said:
Just to cap off this story, I went to (his) bank this morning and presented the question to the teller. She was really nice and was kind of intrigued herself. This was probably voilating some kind of protocol but after typing away for a second she said that there is insufficient money in his account to cash the check, but there are two pretty large pending deposits that would cover the check once they cleared. So, having a reasonable confidence that the check would clear I went over to my bank and deposited it like usual.

She added that writing "For Deposit Only" on the check technically does mean they should not cash the check, but if there were sufficient funds and the Payee was correctly identifiable then she would do it.

......Startup architects are worse than teenagers in the mall when it comes to money....
Click to expand...

The least the guy could do is be like "Look, I'm a little short right now but the check will clear on such and such a date." :rolleyes:

Just remember that if his check comes back as NSF, then you are responsible and the bank usually charges you a fee as well.
 
Yea I also talked to the guy who wrote the check today and warned him that if it comes back he is paying me the entire amount + fee CASH.

And I totally agree with the fact that he should just speak up. If he game me the check and asked me to not deposit it until Monday or something, no prob. I already know he is hanging on by a financial shoestring so it's not like there is an embarrassment factor any more! The funny thing is that I'll work 6 hours a night for two weeks for this guy, inclluding all day Saturday and Sunday, and then it's like I'm screwing him over in getting my money! If it weren't excellent side-cash then I'd just avoid working for him but he actually pays well.....when he pays!
 
I find it fun to put random crap on the memo line. For example, i run the fantasy FB league for some friends and had to pay out to a few of them ( i won it all this year) so in the memo i put things like, "for a good time" or "for happy ending". it makes me laugh thinking of them taking that check to the bank.
 
Pumbaa, good idea. I agree.

Reverend, I actually rent from a friend of mine and occasionally write nice little memo's for him on the checks, myself. He drew the line when I wrote "Bl*w J*b" on one and he demanded a new check. Though he did think it was funny. :D We both decided there might even be some legal implications on that one.....
 
I ran into a couple bounced checks in one of my business, and finally got to the point where I only accept certified funds (cashier's check, money order) or cash.
 

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