How to endorse a check in the United States

Checks are not as common today as they once were, but they are still in use. You will want to know how to endorse a check if you are in the United States and received one, that way you can:

Done correctly, endorsement makes it easy to use checks. But done wrong, the endorsement can make the check difficult and even impossible to cash. Here’s how to endorse a check correctly.

How to endorse a check in the USA

Basically, a check is a piece of paper that instructs a bank or credit union (Credit Union) to pay a specific sum of money to a particular person, company, organization, government agency, or other recipient. This recipient is known as the beneficiary.

To be valid, a check must include a date, beneficiary’s name, amount, and an authorized signature for the bill stream from which the money will be withdrawn.

When someone writes a check, they generally must endorse it so it can be cashed or deposited. To endorse a check, sign your name on the back and include any additional details necessary to process the check properly. Usually only one signature is needed, but the extra steps help control how the payment is handled as well as protect against fraud.

What to consider before endorsing a check

In addition to personal annoyances (late or declined payments, misdirected fund transfers, the need to rewrite a check), wrongly endorsing a check can have legal consequences. Although not considered legal tender, checks are a form of negotiable instruments that serve as a promise to transfer money from one party (sender) to another (payee).

Therefore, an incorrectly endorsed check could spell legal trouble for the sender / payee.

When it comes to the duty to accept an endorsement, banks and other financial institutions (such as credit unions) have a certain degree of freedom. To ensure that a particular financial institution does not reject or dishonor your check, be sure to properly endorse and sign it. Here are some tips to consider before endorsing a check.

How to endorse a check in the United States

Respect the endorsement area

Be sure to restrict the endorsement information in the designated area on the back of the check. As usual, the back of the check has the endorsement area clearly marked, either vertically to the left / right of the check or horizontally across the check.

However, some institutions will not accept the check if you have not followed their guidelines to respect the endorsement area.

Be aware of third-party endorsement guidelines

Some institutions may not accept third-party endorsementsWhile others may accept them with caveats.

Other institutions may ask you to guarantee endorsement, or they may insist that you prove your identity before processing the check. To avoid any problems, make sure you understand the guidelines of the financial institution and inform the beneficiary about it.

Understand the implications of multiple names

You may have to write a check written in several names, written in two different ways: “Pay to the order of Jane Doe and John Q. Public” or “Pay to the order of Jane Doe and / or John Q Public”.

If you intend for either party to be able to cash the check, use or instead of and. It reserves the use of and for those transactions where it specifically requires all payees to endorse the check jointly.

Each institution has its own guidelines and, depending on their policies, institutions can require either party to endorse the check before depositing it.

Endorsements with account numbers

Some institutions encourage writing an account number when endorsing the check. Others discourage this practice because they believe it is a privacy / security risk. Therefore, we recommend that you find out what the policy of your financial institution is on this.

Signature and name must match

When endorsing a check, make sure your name matches or is similar to how the sender wrote it on the front of the check. Financial institutions can reject or avoid processing checks that do not meet this requirement.

How to endorse a check

Names

To be endorsed correctly, the name signed on the back of the check must match the name of the payee written on the front of the check.

Where to endorse

Most checks have a section where the endorsement must be written. This section, known as the approval area, is marked with lines and instructions that say “Do not write, stamp, or sign below this line.”

Endorsement blank

The easiest way to endorse (but also the most dangerous) is to simply sign the check without adding any restrictions. To use this method, known as a blank endorsement, sign your name in the endorsement area. However, only do this if you are about to deposit or cash the check. For example, a blank endorsement might make sense if you’re in a bank lobby or making a remote deposit from home..

Shipping, ATM deposit and more

If you’re mailing the check, depositing it at an ATM, or keeping it for a while, leave the check unsigned until you’re ready to deposit it, or add a restriction to the endorsement. Blank endorsements are risky because someone else can steal the endorsed check and cash it, or deposit it into a different account.

Restrictive endorsement

A restrictive endorsement helps ensure that a check is deposited into a particular account. To use this method, write “For deposit only to account #####” replacing the ### with your account number, as part of the approval.

If the check is lost or stolen, it is more difficult for the thieves to obtain the money, since they will have to alter the endorsement. An alternative to including your account number is to write “For deposit only to account of payee”, which would require thieves to have access to an account in your name. Depending on the situation, you may also need to sign or not if you specify an account number.

Backless

You don’t always have to endorse checks. Some banks allow you to deposit checks without signature, account number, or anything else on the back. Omitting the endorsement can help keep your information private. Check writers can often view online images of processed checks, including the endorsement area, after paying the checks. Without backup, no one can see your signature or your account number unless the bank adds the account number during processing.

For added security, you can still write “for deposit only” in the approval area. Technically this is not an endorsement, but most banks and credit unions would be reluctant to cash that check for anyone.

Who must sign the endorsement?

In some cases, it is not clear who should sign the check. One more time, the person who receives the check is the one who must endorse it. The person who wrote the check has already signed on the front.

Checks payable to multiple people

If a check is payable to you and someone else, how should it be endorsed? Should everyone sign or just one of you? It depends on how the check is written: If the word “and” appears between the names, everyone must sign.

Checks made out to a business

If you run a business and get paid by check, the endorsement is slightly different. The check is paid to the company, not to you as an individual, so you must sign on behalf of the company.

Why is it necessary to endorse checks?

When you get paid with a check, that payment goes to you and no one else. That is, you are the only person who can legally collect that money from the subscriber’s account. However, the easiest way to cash that check (or the money you can spend from your checking account) is to turn it over to your bank and let them handle it.

By endorsing a check, you authorize the bank to collect the payment. The bank has the right to act on your behalf and do the processing for it.

Again, you can deposit a check without endorsing it; Assuming the check is small enough, you deposit it into an account that matches the name of the payee. Banks and credit unions regularly accept checks without endorsement and assume that no problems will arise.

That being said, if getting paid quickly is essential, it is safer to endorse checks properly and thoroughly. Even if your bank allows you to deposit a check without endorsing, there may be the possibility that a problem will arise later and that the bank will remove those funds from your account until everything is cleared up.

No matter what method you use to endorse checks, wait as long as you can before signing one. It’s best to sign while you’re at the bank or in the process of making a mobile deposit, because if you endorse a check and then lose it, the person who finds it will be able to collect the money.

Endorse a check: Practical example

Let’s say you write a check made out to John Smith as a gift. These are your options once you have received this check:

If John Smith wants to deposit the check into his own bank account

PYou can write “For Deposit Only” under “Endorse Here” on the back of the check. Then below that, write your signature along with your account number on the second and third lines respectively. This will cause a teller from your bank or mobile banking software to deposit the funds to that specific account.

If John Smith wants to sign someone else’s check

ANDIn the “Endorse Here” section, you will write “Pay to order of” and the other person’s name. Then below that, sign your name. Then you will give that check to the person whose name you wrote on the back of the check to cash or deposit.

If John Smith wants to cash the check

You can take it to your local bank where you must sign your name in the “Endorse Here” section and then provide the cashier with a photo ID to receive the cash payment.

If John Smith doesn’t have a bank account

You can go to stores that offer check cashing services, such as K-Mart and Ralph’s. The only downside is that those stores often charge a processing fee.

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