How to Endorse a check – What does it mean to endorse a check? Learn everything you need to know about check endorsements below…
You need to endorse any check written to you by someone before you can cash or deposit the check. Through the endorsement, the bank is given the legal right to process the check, and this process is done by people receiving the check and not the person sending.
However, If you’ve never really received a check, you might not know how to endorse a check or even what a check endorsement is.
Actually, some persons make the mistake of just writing their signature only, which makes the check not properly endorsed. Meaning that anyone who can present the check to the bank and get the check cashed or deposited, even if that person is not the payee. However, A signature is usually all that’s needed.
But, to correctly and securely endorse a check, sign your name on the back, and include any additional details required to process the check appropriately, saving it from the hands of fraudsters. The additional steps will help you control how the payment is to be handled.
So, in this post, you will learn how to endorse a check correctly, in the right way, and at the right time.
How to Endorse a Check Properly
Yeah, there are three main types of endorsement, of which we are going to discuss it below. But you have to note the following before you get started.
— Turn over to the back of the check and sign your name there. Most checks give you a space on the back for your endorsement.
— You’ll see a few blank lines (spaces to fill your details) and an “x” that indicates where you should sign your name. The back of the check might also say, “Endorse here” and “Do not endorse / sign/stamp below this line.”
— The warning is there because the bank also uses the back of the check, below the endorsement, for its check-processing data. If you’re not sure how to endorse a particular check, you should ask your bank or credit union for help.
However, the three main types of check endorsement are;
- Blank endorsement
- Restrictive endorsement
- Endorsement in full
1. Blank Endorsement
Don’t think that because we are saying Blank endorsement that the check is going to be blank.
But, we are trying to say that this type of check endorsement includes the payee’s signature with no further instructions, just as u can see on the image below.
2. Restrictive Endorsement
This type of endorsement is a safe method to use. A check endorsed this way can be deposited into a bank account but not cashed.
So, If you write “for deposit only” and include a bank account number, the check can be deposited only into that account.
However, some banks require payees to endorse a check with “for mobile deposit only” to deposit a check remotely with a mobile banking app.
To process a restrictive endorsement:
- Write the phrase “for deposit only” or “for deposit to account number” and/or specify your preferred account.
- Sign your name on the next line, ensuring the signature matches the name on the front of the check.
3. Full Endorsement
Also known as a special endorsement, this type of endorsement creates a “third-party check” that you can give to someone else, who can then endorse it and cash or deposit it.
This type of endorsement is endorsement is commonly used to pay contractors or third parties for services rendered.
To create a third-party check, write, and then sign your name under that instruction.
Never endorse a check-in pencil, because it can be erased. Blue or black ink is best and should show up well and clearly on the back of most checks.
To create a full endorsement:
- Write “Pay to the order of…” and name the person/institution who will receive the money in the endorsement space.
- Next, sign your name below as it appears in the signature on the face of the check.
Note that unlike a blank check, a special endorsement check enables only the person/institution whose name appears on the endorsement to deposit or cash it.
ALSO, an example of this type of endorsement might be when your insurance company (remitter) issues a check to you (payee), and you then need to endorse it to an auto body shop (third party) for work done on your car.
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Note the Following Whenever You Want to Endorse a Check
- Make sure you understand and comply with your institution’s policies.
- Use the matched name and signature whenever you want to endorse a check.
- Don’t use a pencil to endorse a check because it can be erased off.
- Some institutions may not accept third-party endorsements at all, while others may accept them with caveats. So make sure to understand your financial institution’s guidelines.
- Make sure you restrict your endorsement entries within the designated area on the back of the check.
Endorsing your checks is the first thing that should always come into your mind, coz it’s risky to issue a check made out to “Cash.”
If your check is not endorsed, anyone can deposit or cash it, even if they aren’t the intended recipients. So, you should always endorse any receive check made out to “Cash,” with your account number and sign the check’s back.
Nonetheless, whenever you have a check that you should endorse before depositing, always wait until you present the check before a bank teller before endorsing it.
If you lose the check after you’ve endorsed it, anyone who finds it can deposit/cash the amount.