When do i have to endorse a check

And even if it will, it may require you to be present for identification purposes when your third party cashes or deposits the check.

Endorsing a check is a relatively simple process that significantly improves your banking security. Different types of checks require different types of endorsement, but most of them involve signing the backside of a check to prove that you are the legal owner of the funds it represents. Learning how to endorse a check is a basic part of financial literacy, so make sure you know how the system works.

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We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Your Practice. Popular Courses. Banking Checking Accounts. Key Takeaways Endorsing a check is a relatively simple process that significantly improves your banking security.

Different types of checks require different types of endorsement, but most involve signing the back of a check to prove that you are the legal owner of the funds it represents. What Is a Blank Endorsement? What Is a Restrictive Endorsement? What Is a Third-Party Endorsement? Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Articles. Banking Banking Janet Berry-Johnson is an expert in taxes and accounting whose expertise is based in a year career as a certified public accountant.

When somebody writes you a check, you typically need to endorse it so that you can cash the check or deposit it. To endorse a check, sign your name on the back, and include any additional details required to process the check efficiently. 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. Most checks have a 1. This section, known as the endorsement area, is marked with lines and instructions saying, "Do not write, stamp, or sign below this line.

Try to keep your entire signature and any other instructions for the bank in that area. The easiest way to endorse but also the most dangerous is to simply sign the check without adding any restrictions. To use that method, known as a blank endorsement, sign your name in the endorsement area. See "Blank endorsement" in the example. If you plan to mail the check to your bank, deposit it at an ATM, or carry it around for a while, use a different approach.

Blank endorsements are risky because somebody else can steal the endorsed check and potentially cash it or deposit it to a different account. A restrictive endorsement helps ensure that a check gets deposited into a particular bank account. See "Restrictive endorsement" in the example. To use this method, include your account number with your endorsement, and provide instructions saying the money can only be deposited to your account.

To do so, write "For deposit only to account " using your account number , as part of your endorsement. If the check gets lost or stolen, it's more difficult for thieves to get your money—they'll need to alter the endorsement. An alternative to including your account number is to write "For deposit only to account of payee," which would require thieves to have access to an account in your name.

Depending on the situation, you might or might not also have to sign if you specify an account number. You can try to sign a check over to somebody else, effectively paying that person with the check you received. To sign a check over, write "Pay to the order of Be aware that some banks do not allow this type of endorsement because the technique is sometimes used for theft and fraud.

You don't always have to endorse checks. Some banks allow you to deposit checks without a signature, account number, or anything else on the back.

Skipping the endorsement can help keep your information private. Checkwriters can often view images online of processed checks, including the endorsement area, after checks are paid. With no endorsement, nobody can see your signature or your account number unless your bank adds the account number during processing.

In some cases, it's not clear who should sign the check. Again, the person receiving the check needs to endorse it. The person who initially wrote the check already signed on the front. See front and back of check example. If a check is payable to you and somebody else, how should you endorse it? Forgot Username » Forgot Password ». Paper checks are used less and less often nowadays, so a little refresher course in check endorsement is wise.

An improperly endorsed check could make your business vulnerable to fraudulent activity. At the very least, it could delay your funds. Easy enough.