These additional steps help reduce the opportunity for fraudulent check cashing or theft. However, not all banks require endorsements for checks to be cashed. You’ll have to check with your bank to determine what their requirements are for writing or cashing checks.
If you wish, you can also add a restrictive endorsement like “for deposit only” to the back of the business check. A blank endorsement is considered to be risky because the endorser is not restricting the check (or other negotiable instrument). The blank endorsement indicates that whoever is in possession of the endorsed check is considered to be the owner. To avoid such a risk, businesses and individuals should use restrictive endorsements on the checks they receive. Sometimes, you might want to transfer the check to another individual, in which case you’ll need to make a special or full endorsement.
It has no designated payee, so the person who possesses it can demand payment, for example, a check made payable to cash and endorsed on the back with the signature of the account held. The blank endorsement essentially makes the financial instrument into a bearer paper. The risk of a blank endorsement is that if it is lost or stolen, the finder can cash or deposit it. A “special” endorsement allows the payee to make the check payable to another person.
- You don’t need to deposit the check and write a new one to the third party.
- The endorsement authenticates the check, indicating that the payee (the person or entity the check is written out to) acknowledges receipt and approves the transfer of funds.
- Coordinate with the person to find out which bank the deposit will go into.
- That is, it is not registered to any individual but is payable to the person who possesses it.
- There are different ways to endorse a check depending on how the check has been written and what you plan to do with it.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. In the other states, the program is sponsored by Community Federal Savings Bank, to which we’re a service provider. Wise is an online three types of cash flow activities account that lets you spend abroad with your Wise card. To protect your account, we follow a set of rules set by regulatory agencies in… Understand the key differences between APR and APY, and how they affect your savings accounts, CDs, and even crypto investments.
People very rarely write blank endorsements which are also blank checks, and such a document could potentially become a serious liability if it ended up in the hands of the wrong person. On the other hand, a check made out to a specific payee with the amount left blank can be useful in some settings. A special or full check endorsement provides a greater level of security compared to a blank endorsement because it specifies the intended recipient of the funds. When a check is endorsed with a blank endorsement, it becomes negotiable, and the person in possession of the check can present it to a bank or financial institution and receive the funds. These can range from a simple signature (blank endorsement) to more specific endorsements like restrictive (limits the check’s use) and special or full (designates another recipient). For security purposes, it is important to wait to endorse the check until you are ready to complete the deposit.
Types of Endorsements
To do so, write “Pay to the order of [full name]” before your signature. It offers flexibility but also requires trust in the person you’re assigning the check to. A blank endorsement is a simple signature, and does not specify the endorsee.
Often, you can order checks online directly through your bank account. Other options include ordering checks at your local bank branch or calling the bank’s customer service number. Bank reconciliation, or balancing your checkbook, can help you track checks and other transactions each month.
- The three ways to process a check are blank, restrictive, and special endorsements.
- Usually, if you endorse a check via mobile, you will have to do a restrictive endorsement.
- Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
- Before we dive into some tips for endorsing checks, it’s important to understand what each section of a check represents.
- Using a mobile app to deposit a check makes the process quick and easy when done correctly.
It is possible to sign a check over to someone else, but it’s often ill-advised. There are different ways to endorse a check depending on how the check has been written and what you plan to do with it. There are several ways to endorse a check, and how you endorse a check depends on what you want done with the money and how the check needs to be filled out. You may run into this issue when you and your partner receive a paper check from the IRS or another government agency. While the steps for endorsing a check are very similar in most countries, there are some differences.
What else do I need to know about how to endorse a check?
Writing a check to yourself is another way to withdraw cash from your bank account or transfer money between accounts. While there are more efficient ways to withdraw money from the bank, writing a check to yourself is an option. There are a few different types of endorsements, which serve specific purposes. Here’s a breakdown of each and how you can guarantee your check is processed correctly and securely. Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first.
Sometimes this is done if someone is sending payment before the due date or doesn’t have sufficient funds in their account when the check is written. Hold onto the check until you know it has cleared and the funds are deposited into your bank account. It’s a good idea to destroy the check once credited to your account. To make your check secure and provide instructions to your bank, write “For Deposit Only to Account Number XXXXXXXXX.” Then sign your name below that, staying within the endorsement area. Statements, whether sent via mail or email, typically include instructions on making a payment.
Depending on the situation, you might or might not also have to sign if you specify an account number. To be endorsed correctly, the name signed on the back of the check needs to match the payee’s name on the front of the check. If your name was misspelled or written incorrectly, sign it with the incorrect version, and then sign again using your correct name. The best way to do this is to follow the instructions provided by your bank’s app, as they may vary from one another. Your details won’t show up on images of the processed check online, so there’s no risk of giving away your account number or signature.
Create a Free Account and Ask Any Financial Question
We follow strict ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources. This team of experts helps Finance Strategists maintain the highest level of accuracy and professionalism possible. It’s advisable to verify the authenticity of the payee’s identity by comparing identification documents or conducting online searches if necessary. You’re trying to get the most value out of the money you spend, so you can help your business grow.
Always Double-check Your Check
Some banks provide complimentary checks when you open a checking account. This method also is commonly used for ATM deposits and mobile deposits. Once that check is signed, anyone in possession of it could attempt to cash it.
A restrictive endorsement ensures that a check will be deposited into a specific account. Adding a restriction such as “for deposit only” or “for mobile deposit only” to the endorsement area helps to reduce the risk of the money being stolen if the check is lost. In fact, some institutions now require this to be written on checks before they are deposited. This signature is written before the check is transferred to the payee’s bank.
A signature is usually all that’s needed, but additional steps can help you control how banks handle your payment and protect you from fraud. When someone writes you a check, you typically need to endorse it so that you can cash the check or deposit it. Endorsing a check helps the bank verify you as the recipient and authorizes the bank to make the transaction. Either way, you’re authorizing the bank to convert the check into cash on your behalf. Endorsing a check by signing the back of it is a security step that simultaneously helps to verify you as the proper recipient of the funds and authorizes the bank to complete the transaction. Blank endorsement of a financial instrument, such as a cheque, is only a signature, not indicating the payee.
Effectively managing your checking account means acquiring basic skills, including writing and endorsing a check. Knowing how to write a check, endorse it for deposit and order more checks can help you maximize the value of your checking account and your banking relationship. Many bank and credit union ATMs allow customers to deposit checks. Depending on the specific ATM, there may be an envelope you need to use for your deposit. You may receive a check and then want to hand it over to someone else for payment.
What is a Blank Endorsement?
Also known as a third-party check, this is where the original recipient of a check signs it over to a third person. If you aren’t going to cash checks yourself, or can’t do it in person, you should make sure these specifications are clearly listed. Everything from making sure that the check is filled out correctly, to making sure it isn’t modified after your endorsement.
