How to Properly Endorse a Check for Cash

Understanding Check Endorsements

A check endorsement is a signature or instruction placed on the back of a check, which serves to authorize its payment or transfer. This transfers ownership of the funds. Properly endorsing a check is a necessary step before it can be cashed, deposited, or transferred to someone else. The specific type of endorsement dictates how the check can then be handled.

One common form is a blank endorsement, which involves only the payee’s signature. This makes the check a “bearer instrument,” meaning anyone who possesses it can cash it. While convenient for immediate cashing, it carries a risk because if the check is lost or stolen after being blank endorsed, anyone finding it could potentially cash it.

Another type is a special endorsement, used when the payee wishes to transfer the check to a specific third party. This endorsement includes the phrase “Pay to the order of [New Payee Name]” followed by the original payee’s signature. This ensures that only the named new payee can then cash or deposit the check. A restrictive endorsement, such as writing “For Deposit Only” along with the signature, limits the check’s use strictly to being deposited into an account, preventing it from being cashed.

Endorsing Your Check for Cash

When preparing a check for cashing yourself, the most common method is a blank endorsement. To do this, turn the check over to the back and locate the designated endorsement area, typically on the left end. Sign your name exactly as it appears on the “Pay to the Order of” line on the front of the check. If your name is misspelled on the front, sign it both as it appears misspelled and then correctly.

It is generally advised to perform this blank endorsement only when you are physically present at the location where you intend to cash the check. This practice minimizes the risk of loss or theft, as an unendorsed check is much harder for an unauthorized person to cash.

If you intend for another person to cash the check on your behalf, you would use a special endorsement. On the back of the check, write “Pay to the order of [Name of Person Cashing]” followed by your signature. Not all financial institutions or check-cashing services accept checks endorsed to a third party, so the person receiving the check should confirm their ability to cash it beforehand.

Cashing Your Endorsed Check

Once your check is properly endorsed, you can proceed to cash it at various locations. The bank on which the check is drawn is often the most straightforward place to cash it, even if you do not have an account there. Alternatively, you can cash the check at your own bank or credit union by depositing it into your account and then withdrawing the cash, or by directly cashing it if your account has sufficient funds and their policies permit.

Other options include check cashing services. Some large retail stores also offer check cashing services, often for a smaller fee than dedicated check cashing establishments. These services can be convenient, but it is important to be aware of any associated costs.

Regardless of where you choose to cash the check, you will be required to present valid photo identification. Acceptable forms of ID include a driver’s license, a state-issued identification card, or a passport. The financial institution or service will verify your identity to prevent fraud.

They may also contact the issuing bank for larger amounts or if the check appears unusual. Fees for cashing checks can range from a small flat amount to a percentage of the check’s value, typically between 1% and 5% of the check amount. There may also be limits on the maximum amount of cash that can be disbursed.