When Do I Sign a Check and Where?

A check is a written order directing a bank to pay a specific amount from an account to a recipient. Signatures are a fundamental component for checks, acting as an authorization and validation mechanism. Correct signatures ensure a check’s validity and allow funds to move securely.

Signing a Check to Issue It

When you write a check, you are the drawer, authorizing your bank to release funds. The drawer’s signature is essential for the check to be a legal instruction to the bank. This signature appears on the front of the check, on the bottom right-hand side, in a designated signature line. It serves as your authorization for the payment.

Only the authorized account holder or a designated signatory can legally sign a check to issue it. If the signature is missing, illegible, or forged, the bank will reject the check, meaning it cannot be processed for payment.

Signing a Check to Deposit or Cash It

After receiving a check, the payee must sign it to deposit or cash it. This act is known as endorsing the check, signifying the transfer of ownership of the funds. The endorsement is typically placed on the back of the check, usually on the left end, where a space is often provided with lines or instructions like “Endorse Here.” Proper endorsement is necessary for the bank to accept the check.

There are different types of endorsements, each serving a specific purpose. A blank endorsement involves only the payee’s signature, making the check payable to anyone who possesses it; this type carries the most risk if the check is lost. A restrictive endorsement limits what can be done with the check, such as “For Deposit Only” followed by the payee’s account number, which ensures the check can only be deposited into that specific account. A special endorsement, also known as an endorsement in full, transfers the check to another specific person or entity by writing “Pay to the order of [New Payee’s Name]” followed by the original payee’s signature.

Understanding Signature Variations

Checks originating from joint accounts require careful consideration regarding signatures. If the account agreement specifies “and” between the account holders’ names, both individuals may need to sign the check to issue it. Conversely, if the agreement uses “or,” either individual may be able to sign independently. Understanding the specific terms of a joint account is important to ensure checks are properly authorized.

Business checks often involve additional layers of authorization. Authorized signers for business accounts are typically designated by corporate resolution or similar documentation provided to the bank. Some business accounts may require multiple signatures for checks exceeding a certain amount, or they might necessitate the application of a corporate seal alongside a signature. These measures are designed to enhance internal controls and prevent unauthorized disbursements.

When a check is made out to multiple payees, the required endorsements depend on how the payees’ names are listed. If the check reads “John Doe and Jane Doe,” both individuals generally must endorse the check for it to be cashed or deposited. If it reads “John Doe or Jane Doe,” either individual may endorse the check independently. A missing or improper signature from the drawer can lead to the check being returned unpaid, often marked as “Refer to Maker” or “Signature Missing.” Similarly, an incorrect or missing endorsement by the payee can result in the bank rejecting the deposit or cashing request.