Where to Endorse a Check and Different Ways to Do It

Endorsing a check is a legal authorization to transfer funds from one party to another. This involves signing the back of the check, a necessary step for it to be deposited or cashed. Proper endorsement ensures financial institutions can process the transaction.

Locating the Endorsement Area

Locate the designated area on the back of the check, typically on the left-hand side. Many checks feature markings like a solid line, a box, or “ENDORSE HERE” to guide the payee.

A phrase stating, “DO NOT WRITE, STAMP OR SIGN BELOW THIS LINE,” indicates the lower boundary for the endorsement. This reserved space is for bank processing codes and routing information. Endorsing within the specified region ensures automated banking systems can read the necessary data without interference.

Types of Endorsements and How to Apply Them

Understanding the different types of endorsements is important for managing how a check’s funds can be accessed. Each type serves a distinct purpose, offering varying levels of security and control over the funds. Applying the correct endorsement depends on the payee’s intentions for the check.

Blank Endorsement

A blank endorsement is the simplest form, requiring only the payee’s signature on the back of the check. This type carries the most risk because once signed, the check becomes a bearer instrument, meaning anyone in possession of it can cash or deposit it. It is advisable to only use a blank endorsement immediately before presenting the check to a financial institution.

Restrictive Endorsement

A restrictive endorsement limits how the check can be used, offering enhanced security. The most common restrictive endorsement is “For Deposit Only,” followed by the payee’s signature or account number. This ensures that the check can only be deposited into a specified account, mitigating the risk if the check is lost or stolen before deposit. This method is particularly useful for mobile deposits, where banking applications often guide users to apply this specific wording.

Special Endorsement

A special endorsement, also known as a third-party endorsement, allows the payee to transfer the check to another individual or entity. This is accomplished by writing “Pay to the order of [New Payee’s Name]” followed by the original payee’s signature. The check then becomes payable to the new payee, who must then endorse it themselves to cash or deposit the funds. This type of endorsement is less common but useful for directly transferring a payment.

Endorsing for Specific Situations

Depositing a Check

When preparing to deposit a check, employing a restrictive endorsement such as “For Deposit Only” is a recommended practice. This approach ensures that even if the check is misplaced before reaching the financial institution, the funds can only be credited to the intended account, providing a layer of protection against unauthorized access.

Cashing a Check

For cashing a check, a blank endorsement, consisting solely of the payee’s signature, is typically used. Due to the security implications of a blank endorsement, it is prudent to sign the check only when physically present at the bank or credit union to cash it. This minimizes the period during which the check could be intercepted and misused.

Multiple Payees

When a check is made out to multiple payees, the required endorsements depend on how their names are joined. If the names are separated by “and,” such as “John Doe AND Jane Smith,” all listed payees must endorse the check for it to be validly processed. Conversely, if the names are joined by “or,” like “John Doe OR Jane Smith,” only one of the listed payees is required to endorse the check for deposit or cashing.

Name Discrepancies

Occasionally, the name printed on a check may slightly differ from the payee’s legal name or identification. In such instances, it is generally accepted practice to endorse the check with both the name as it appears on the check and the payee’s correct legal name. For example, if a check is made out to “Jon Doe” but the legal name is “Jonathan Doe,” the endorsement should include both spellings.