What Do You Put on the Back of a Check?

Signing the back of a check, known as an endorsement, serves a crucial purpose within the financial system. This signature transforms the check into a negotiable instrument, authorizing the transfer of funds. Endorsing a check is a fundamental step that verifies you as the intended recipient of the money, allowing banks to process the transaction securely. Without a proper endorsement, a check cannot be cashed or deposited, as it lacks the necessary authorization for the funds to move from the payer’s account to yours. This process ensures accountability and helps maintain the integrity of financial exchanges.

Understanding Check Endorsements

A check endorsement is essentially your legal consent to transfer the funds represented by the check. It authenticates the check, indicating that the payee acknowledges receipt and approves the transfer of funds. There are several types of endorsements, each with distinct implications for how the check can be used and the level of security it provides. Understanding these different types is important for managing your funds effectively.

A blank endorsement involves simply signing your name on the back of the check. This is the most common and straightforward method, but it also carries the highest risk. Once endorsed in blank, the check becomes a “bearer instrument,” meaning anyone who possesses it can cash or deposit it. If a check with a blank endorsement is lost or stolen, it can be easily misused, leading to potential financial loss.

For enhanced security, a restrictive endorsement limits how the check can be used. The most common form is writing “For Deposit Only” followed by your signature and, optionally, your account number. This instruction ensures that the check can only be deposited into a specified account, preventing it from being cashed or further transferred. Restrictive endorsements are particularly beneficial for protecting against fraud and ensuring funds are directed appropriately, especially when mailing checks.

A special endorsement allows you to transfer the check to another person or entity. This is done by writing “Pay to the Order of [New Payee’s Name]” and then signing your name below it. This type of endorsement effectively turns over ownership of the check to the new designated party. While it can be convenient for transferring funds, some banks may not accept third-party checks due to increased fraud risks.

How to Endorse a Check

The physical act of endorsing a check is typically performed on the back, usually within a designated area often labeled “Endorse Here.” This area is usually located on the top left portion of the back of the check. Your signature should be clear and legible, matching the name as it appears on the front of the check. Using blue or black ink is essential, as other colors or writing instruments like pencils may cause the check to be rejected by the bank.

For a blank endorsement, simply sign your name exactly as it is written on the “Pay to the Order of” line on the front of the check. This signature should be placed within the designated endorsement area. It is advisable to sign the check only when you are at the bank or are immediately ready to deposit it, to minimize the risk associated with a lost or stolen blank-endorsed check.

When applying a restrictive endorsement, write “For Deposit Only” above your signature. You can also include your account number to further specify where the funds should be deposited. This clear instruction ensures the check can only be processed for deposit and not cashed. For mobile deposits, many banks require “For Mobile Deposit Only” to be written below your signature.

To perform a special endorsement, write “Pay to the Order of [New Payee’s Full Name]” on the back of the check, then sign your own name below that statement. This action transfers the check’s ownership to the new payee. The new payee will then need to endorse the check themselves to deposit or cash it.

Specific Endorsement Scenarios

Checks made out to multiple payees require careful attention to how they are endorsed. If the names are joined by “and,” such as “John Smith AND Jane Doe,” both individuals must endorse the check for it to be processed. Conversely, if the names are joined by “or,” like “John Smith OR Jane Doe,” either person can endorse and deposit or cash the check individually.

When a check is made out to a business, an authorized representative of the business must endorse it. This typically involves signing the business name exactly as it appears on the payee line, followed by the authorized individual’s signature and their title within the company, such as “Owner” or “Accountant.” Adding a restrictive endorsement like “For Deposit Only” is often recommended for business checks to enhance security.

Endorsing a check for a minor involves specific procedures, as minors typically cannot legally endorse checks themselves. A parent or legal guardian can endorse a check made out to a minor. This is often done by writing “Pay to the Order of [Parent/Guardian’s Name] FBO [Minor’s Name]” or similar phrasing, followed by the parent or guardian’s signature. It is advisable to consult with your bank regarding their specific requirements for such endorsements.

If your name is misspelled on a check, you should endorse it by first writing the misspelled name exactly as it appears on the check, then immediately writing your correct name underneath it. This dual signature clarifies that you are the intended recipient despite the error. This method helps banks verify your identity and process the check without issues.

Avoiding Common Endorsement Mistakes

To ensure smooth processing, avoid these common endorsement mistakes:
Signing outside the designated area: Checks have a specific “Endorse Here” space. Signing outside this area or writing in other parts of the check may lead to the bank rejecting the check for processing, causing delays.
Adding excessive notes: Avoid writing personal messages or extraneous information beyond the necessary endorsement details. The back of the check should remain clear for banking stamps and processing to prevent confusion.
Physical damage: Avoid tears, excessive folds, or stains, especially in the endorsement area. Banks may refuse to accept damaged checks, requiring you to request a new one from the payer, which can be inconvenient.
Using non-permanent ink: Always use permanent blue or black ink. Using a pencil, crayon, or other non-permanent writing tools can make the endorsement susceptible to alteration or fading, which can lead to significant processing delays or outright rejection.