Coordinate with the person to find out which bank the deposit will go into. The bank might require you to go with the payee, to assure the bank that there’s nothing suspicious about your transaction. However, before you consider this, find out if both your bank and their bank allows this. Also known as a third-party check, this is where the original recipient of a check signs it over to a third person. Every bank offers checks with a unique design, but the basic sections remain the same.

You can use a check made out to you to pay someone else by telling the bank to pay it to that individual. You can also use a blank endorsement and tell the bank teller in person where you’d like the money to go. With a mobile banking app, you can deposit a check simply by photographing it, provided you endorse it properly. Then, write your company title, such as President or Owner, on the third line. If you wish, you can also add a restrictive endorsement like “for deposit only” to the back of the business check.

• When you hand the bank a check for deposit, you’re giving consent to have those funds put into your account.
• Your bank’s app may provide these instructions, or you can contact your bank prior to preparing your deposit.
• Now that you know what it means to endorse, figure out the best way to deposit checks.
• Some banks prefer a check with a restrictive endorsement to have the recipient’s account number written clearly on the check, while others see this as a security risk.
• 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.
• For example, If the check is written out to “Jane and John Doe,” both parties must endorse the check.

The articles and research support materials available on this site are educational and are not intended to be investment or tax advice. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Once a check is endorsed, it is effectively “live” money, and if it falls into the wrong hands, it can lead to financial loss for the endorser. Different types of endorsements serve different purposes and entail varying levels of risk. The endorser must understand the implications of each type to select the most appropriate one based on the situation.

What Is a Check Endorsement?

Sometimes this is done if someone is sending payment before the due date or doesn’t have sufficient funds in their account when the check is written. If you write checks, you’ll run out and need to order more at some point. Some banks provide complimentary checks when you open a checking account. That said, if it’s essential that you get paid quickly, it is safest to endorse checks properly and thoroughly.

• Mistakes not only cause inconvenience but can also lead to disputes or legal issues.
• Misunderstanding or misuse can lead to a variety of complications, from check fraud to legal repercussions.
• Also known as a third-party check, this is where the original recipient of a check signs it over to a third person.
• Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy.
• This endorsement is made by writing “Pay to the order of [third party’s name]” followed by the endorser’s signature.

Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. When writing a check to the IRS, you’ll need to include the standard check information on it and some other required information.

How To Endorse Checks

In most cases, “endorsement” simply means that you need to sign the back of the check before you can deposit or cash it. Many banks might refuse checks with conditional endorsements because of their complexity. An FBO endorsement indicates that the funds from a check should be used for the benefit of a named third party. Unlike a special or full endorsement, the original receiver of the check retains control of it, but earmarks the funds for another’s benefit.

How To Endorse a Check

A special endorsement is when the payee signs the back of a check and designates a specific person or entity as the recipient, limiting the negotiation of the check to that designated party. This type of endorsement is typically used when the payee wants to transfer the check to someone else or when the payee wants to convert the check into cash. A blank endorsement’s primary advantage is its simplicity, making transactions straightforward. These can range from a simple signature (blank endorsement) to more specific endorsements like restrictive (limits the check’s use) and special or full (designates another recipient).

Are there any risks involved in using a blank endorsement on checks?

Misplacement or theft of endorsed checks can lead to financial loss. Errors in endorsement can cause delays or disputes in check processing. It facilitates banking convenience, allowing customers to deposit checks via ATMs or mobile apps. It is always recommended to have a back to the check to provide additional security and validity. This type of endorsement passes title of the check to the payee, but with certain conditions/restrictions. You qualify the check by writing the words “without recourse” in the endorsement area.

Check endorsement adds a layer of security to the check processing procedure. By requiring a physical signature and providing various endorsement options, banks can validate the authenticity of the transaction and minimize the chances of fraud. In a world where mobile banking apps, online bill pay and electronic transfers rule, you can still receive a hardcopy check. ” Sadly, digital technology and online banking have pushed the art of check writing to the side, but you still need to know your way around a paper check.

Only the Payee Can Sign/Endorse the Check

Some types of negotiable instruments may be commonly presented in the form of a blank endorsement for purposes of facilitating the transfer of ownership smoothly. There are also other settings in which the ability to endorse something without indicating a specific payee can be useful. Such instruments should be carefully guarded, however, to ensure that they do not end up in the wrong hands, as anyone can cash them.

It is possible to sign a check over to someone else, but it’s often ill-advised. There are different ways to endorse a check depending on how the check has been written and what you plan to do with it. Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, what is property, plant, and equipment pp&e and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest. Ever since she began contributing to the site several years ago, Mary has embraced the
exciting challenge of being a SmartCapitalMind researcher and writer.