What Do I Write to Endorse a Check?
Understand the crucial details of endorsing a check. Learn the correct methods for signing the back of checks to ensure smooth transactions.
Endorsing a check involves signing the back to authorize its payment or transfer. This signature allows a financial institution to process funds. Proper endorsement is a required step for depositing, cashing, or transferring a check.
Where and How to Sign Your Name
Sign your name on the back of the check within the designated endorsement area, typically a blank space at the top. Ensure your signature does not extend beyond this space or interfere with other check details.
The name you sign should precisely match the payee’s name printed on the “Pay to the Order of” line on the front of the check. If your name is misspelled on the check, sign it exactly as misspelled, then sign your correct legal name directly below. Using a consistent signature, as it appears on your bank records, helps prevent processing delays.
How to Endorse for Deposit
Endorsing a check solely for deposit into an account is a secure practice, known as a restrictive endorsement. Write “For Deposit Only” above your signature in the endorsement area. Including your bank account number below “For Deposit Only” further ensures funds are credited only to that specific account.
This endorsement enhances security. If a check endorsed “For Deposit Only” is lost or stolen, it cannot be cashed by anyone else. The financial institution will only process it as a deposit into the specified account, safeguarding your funds. This method minimizes risk for checks not being immediately cashed.
How to Endorse for Cashing
To cash a check immediately, use a blank endorsement by signing only your name on the back. Once endorsed this way, the check becomes a bearer instrument, meaning anyone possessing it can potentially cash it, similar to carrying cash.
Due to this risk, only apply a blank endorsement at the financial institution or check-cashing service where you plan to cash the check. Avoid signing a check in advance, as losing it could result in someone else cashing your funds. Financial institutions typically require valid photo identification to verify your identity before cashing any check.
How to Endorse for Another Person
You can transfer a check to another person using a special endorsement, also called a third-party endorsement. Write “Pay to the Order of [New Payee’s Name]” above your signature on the back of the check. For example, to transfer a check to John Doe, write “Pay to the Order of John Doe” followed by your signature.
After your endorsement, the new payee must then endorse the check themselves by signing their name below your endorsement to cash or deposit it. This transfer makes you, the original endorser, responsible if the new payee cannot collect the funds. This type of endorsement is less common due to increased liability and potential complications.
Endorsing Checks with Multiple Payees or for Businesses
Checks issued to multiple payees require specific endorsement procedures based on how names are separated. If names are joined by “and” (e.g., “John Doe AND Jane Smith”), both individuals must endorse the check. If names are separated by “or” (e.g., “John Doe OR Jane Smith”), either person can endorse and process the check independently.
For checks made out to a business, an authorized representative must endorse it. The signatory should sign the business name, often followed by their title, in the endorsement area. Many businesses use a rubber stamp with the business name and “For Deposit Only” to ensure direct deposit into the company’s account, providing security and an audit trail.