Signing a check on the back is referred to as an endorsement. You’ll typically have to endorse a check to deposit it in your bank account or to cash it, but how you will do so depends on the type of check, how you’re depositing it, and how you want to use the funds.
The endorsement is necessary for the issuing bank or financial institution to transfer the funds associated with the check in most cases.
- You’ll typically endorse a check by signing it on the back.
- Endorsing a check significantly improves your banking security.
- Different types of deposits can require different types of endorsements.
- Some types of endorsements can be subject to certain rules imposed by your bank.
How to Endorse a Check
Endorsing a check is a relatively simple process:
- Confirm check information for accuracy: Ensure that the check is made out to you, that the date is accurate, and the amount paid to you is correct. Some banks won’t cash a check that’s more than six months old.
- Decide who should endorse the check: Both people must endorse the check if its pay-to line lists two people such as a teen and a parent or spouses. Either person can endorse the check if its pay-to line lists either one person “or” the other. Both must sign if their names are linked by the word “and.”
- Look for the location to endorse: On most checks, you’ll look at its back. A box at the top should contain at least three lines with the heading “Endorse Here” and another, larger box beneath it with the heading “Do Not Write, Stamp, or Sign Below This Line.” Endorse the check in the top box.
- Endorse the check: Sign your name as written on the check using ink, not pencil. Write the incorrect name first if your name was misspelled then write your correct name below the incorrect name and official signature.
Banks require that you endorse checks to prevent check fraud. Signing the back of a check helps confirm your identity. But criminals can intercept your check before processing, alter the endorsement, and steal the money associated with the check so you should limit the time between endorsing a check and having it processed. This gives criminals the smallest possible window to steal it.
A restrictive endorsement contains information that limits deposit use.
Restrictive Endorsement by Account
To restrict a deposit to a specific account:
- Write “For Deposit Only” on one line.
- Write the account number on another line.
- Sign your name on a third line.
This endorsement approach is the most secure because it instructs your bank that funds should only be sent to the account you’ve specified. Funds can’t be given out as cash or deposited into any other account. But the person who wrote you the check will see your bank account number if they receive a copy of the canceled check from their bank.
Restrictive Endorsement for Mobile Deposit
Another type of restrictive endorsement is available when you’re using your bank’s mobile deposit app. Most banks will require you to follow these steps due to federal regulations that were passed in 2018:
- Sign your name on one line.
- You may have to write “For (bank name) mobile deposit only” or “For mobile deposit only at (bank name)” below that line.
You must specify the financial institution and intend to deposit the check remotely.
Other Types of Endorsements
It’s possible to endorse a check in other ways whether you’re passing the funds on to someone else or cashing it. You can use a check made out to you to pay someone else by telling the bank to pay it to that individual. You can also use a blank endorsement and tell the bank teller in person where you’d like the money to go.
Endorsing a Check to a Third Party
It’s possible to use a check that’s made out to you to pay someone else. You can send the money associated with the check directly from the payee to someone else. This is known as a third-party endorsement. Each bank decides whether to accept third-party checks and some may choose not to do so.
Write the following in the endorsement area:
- “Pay to the order of” followed by the name of the individual who you wish to have the money.
- Sign your name beneath that line.
Your chosen recipient would sign their name beneath yours before depositing or cashing the check.
This is an insecure way to send money. It can be a good idea to accompany this person to the bank to provide proof of identification. Banks frequently won’t accept checks endorsed this way unless the payee is present.
Your bank will probably tell you to deposit the funds into your account first then send the funds differently if you try to endorse a check this way. .You should ensure that both the check writer’s and the payee’s banks accept the endorsement if you have no choice. The check will bounce otherwise and you won’t be able to access the funds.
A blank endorsement is the least secure way of endorsing a check but it’s also the most common. Sign your name on the back of the check and tell the bank teller whether you want to deposit it to a particular account or cash it. You can also use a blank endorsement when you deposit a check in an ATM. This isn’t a very secure way to endorse a check but you can limit the possibilities for fraud if you sign it just before you deposit it.
Sometimes a check will be made out to a business rather than to an individual. An authorized individual must endorse a check on behalf of the company in this case.
Endorsing a check for a business is slightly more complex but it’s done in the same box where you endorse checks by individuals:
- Write the name of the business.
- Sign your name underneath this line along with your company title in print form.
A bank is usually legally responsible if it accepts an improperly endorsed check but it may not be liable if it accepted the check in good faith and your failure to exercise ordinary care contributed to the alteration or forgery, according to the U.S. Office of the Comptroller of the Currency.
Common Issues with Endorsing a Check
The process of endorsing a check seems straightforward but issues can arise. These can delay how long it takes for your bank to process a check and they can even prevent your bank from doing so altogether.
One of the most common problems you’ll encounter when endorsing a check is that the person who wrote it has misspelled your name. This can be an issue because your bank may refuse to process the check if there’s a mismatch between the spelling on the front and your endorsement,
Unfortunately, other than asking the check writer to void this check and write another, the only way around this issue is to copy their incorrect spelling in your endorsement. Then you can provide your correct name in your official signature.
A check will sometimes be made out to multiple payees. This is often the case with checks that are given as wedding gifts. The check may be made out to “John and Jane Smith.” This simple form of wording can create a real inconvenience because many banks will insist that both parties must endorse the check even if it’s being deposited into a joint account held by both of them.
Consult with your bank about its processing policy if you receive a check like this. And you can make life easier for them by writing “John OR Jane Smith” if you’re making out a check for a couple.
You should be wary if a person you don’t know well asks you to endorse and deposit a check, particularly under some circumstances:
- The check is for more than is owed to you.
- You’re asked to send a portion of the funds elsewhere for taxes or fees.
- You’re asked to send some of the funds to another person.
- You’re asked to withdraw funds from the check by wire, gift card, money order, or cryptocurrency.
The check may “clear” your account right away if the funds are available but the checks in these situations are usually fraudulent. It can take days to discover the fraud and you must then repay your bank any funds you’ve withdrawn based on the fraudulent check.
Do You Always Have to Endorse a Check?
The vast majority of checks will have to be endorsed to be used. Endorsements provide extra security for your funds so most banks will be reluctant to take a check that hasn’t been properly endorsed.
Can You Deposit a Check That’s Not in Your Name?
Sometimes, but it depends on your bank’s policies. Call your bank and ask if it will allow you to cash a third-party check and, if so, how you can do so. The bank may ask you to come in with the person to whom the check is made out. Others may require that the person write their intent on the back of the check.
What Is a Restrictive Endorsement?
A restrictive endorsement includes not only the signature of the endorser but the words “For Deposit Only” and the bank account number or financial institution in which it is to be deposited. This prevents anyone else from cashing or depositing the check into an incorrect account or institution.
What Is a Third-Party Endorsement?
A third-party endorsement involves signing over a check made out to you to someone else. You first write “Pay to the order of,” followed by the name of the person you wish to have the funds. Then you sign your name below that. Many banks will no longer accept such an endorsement so make sure in advance that your bank will do so. It may require that you be present for identification purposes when your third party cashes or deposits the check.
The Bottom Line
Endorsing a check is a relatively simple process and it significantly improves your banking security. Different types of checks require different types of endorsements, but most involve signing a check’s back to prove that you’re the legal owner of the funds it represents. Learning to endorse a check is a basic part of financial literacy, so be sure you know how the system works.