Do I Endorse a Check I Write?
Clarify check endorsement roles. Learn why the check writer doesn't endorse their own check, and who actually does.
When a check changes hands, questions often arise about the necessary steps to ensure it can be properly processed. One common point of confusion centers on who is responsible for endorsing a check, particularly whether the person who writes it also needs to sign the back. This article will clarify the mechanics of check endorsement, distinguishing between the actions of the check writer and the recipient.
Understanding Check Endorsement
A check endorsement is the act of signing the back of a check, which serves to approve its deposit, cashing, or transfer. This process transfers the legal ownership of the check or authorizes its payment to a specific account. Endorsement is a security step that helps verify the proper recipient of funds and authorizes the bank to complete the transaction. Without proper endorsement, a check cannot be securely deposited or cashed.
The primary purpose of endorsing a check is to validate its authenticity and approve its payment to the designated payee. This action serves as a legal verification of the transfer of ownership from one party to another. Endorsements contribute to banking security, making it more challenging for unauthorized individuals to cash a check. The person or entity receiving the payment, known as the payee, is responsible for endorsing the check.
Your Role as the Check Writer
As the individual writing the check, also known as the maker or drawer, you do not endorse it. Your signature is placed on the front of the check, typically on the bottom right corner. This signature serves as your authorization and instruction to your bank to pay the specified amount from your account to the named payee. By signing the front, you are initiating the payment and instructing your bank to disburse funds.
Your responsibilities as the check writer include accurately filling in the payee’s name, the numerical and written amount, and the current date. Ensuring these details are correct is important, as discrepancies can cause processing issues. Your signature on the front is the legal command for the transaction to proceed.
The act of endorsing is specifically for the person who receives the check to authorize its further processing. You have already authorized the payment by writing and signing the front of the check. Signing the back of a check you wrote is not necessary and can even create confusion for the bank. Your role concludes once the check is properly filled out and signed on the front, and then issued to the intended recipient.
The Recipient’s Role in Endorsing
The recipient of a check, known as the payee, is the party responsible for endorsing it. This is typically done by signing their name on the back of the check, usually in the designated “Endorse Here” area. The endorsement authorizes the bank to process the check for deposit or cashing. If the check is made out to multiple people, both may need to sign, depending on whether their names are joined by “and” or “or.”
There are several common ways a recipient can endorse a check. A blank endorsement involves only the payee’s signature. While simple, this method is the least secure because it makes the check payable to anyone holding it, similar to cash. It is advisable to use a blank endorsement only immediately before cashing or depositing.
A more secure option is a restrictive endorsement, which limits how the check can be used. This is typically done by writing “For Deposit Only” and often including an account number, followed by the payee’s signature. This instruction ensures the funds are deposited directly into a specified account, preventing the check from being cashed if lost or stolen.
A special endorsement allows the payee to transfer the check to another person or entity. This involves writing “Pay to the Order of [New Payee’s Name]” above the original payee’s signature. The new payee must then also endorse the check to deposit or cash it.