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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. To endorse a check, you will sign the back in the endorsement box.
The process for endorsing a check may vary slightly from bank to bank. So exactly who you will endorse will depend 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.
Endorsing a check is a relatively simple process. Here are the basic steps:
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.
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."
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.
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.
In different scenarios, you may have to endorse a check in different ways, such as if you're passing the funds on to someone else.
A restrictive endorsement contains information that limits deposit use.
To restrict a deposit to a specific account:
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.
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:
You must specify the financial institution and intend to deposit the check remotely.
A special endorsement is when you 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:
Your chosen recipient would sign their name beneath yours before depositing or cashing the check.
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.
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.
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:
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.
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.
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 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.
You can endorse a check made out to you to someone else. To do this, you sign your name as you would to receive the funds your self. Then, under your signature, write "Pay to the order of" and then the name of the person to whom you'd like to endorse your check. Be sure to write clearly.
Endorsing a check for mobile deposit requires an extra step. With this process, you will sign the back of the check and also write "For Mobile Deposit Only" in the signature box. If you don't include the "For Mobile Deposit Only" line, your check may be rejected.
The person who is supposed to endorse, or sign, a check is the person who is named on the front of the check. That person must sign the back of the check to receive the funds.
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.
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.
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