With this option, the payee simply signs at the back of the bank check and proceeds to present it either for encashment or deposit. Ironic as it may sound, but the process is referred to as blank endorsement primarily because there are no specific or additional instruction as well as limitations applied on the bank check. If a check is endorsed but then lost or stolen, it can be cashed or deposited by unauthorized individuals. This risk is especially high with blank endorsements, which don’t limit who can cash or deposit the check.
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- If the check gets lost or stolen, it’s more difficult for thieves to get your money—they’ll need to alter the endorsement.
- If a check does not have the right endorsement or any at all, you may be unable to access the funds.
- When you sign over a check to a third person, you need to realize that the check funds will no longer be going to you but to the person you name in the endorsement.
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The endorser simply signs their name on the back of the check in the designated area. However, this step should ideally be performed in the bank or right before depositing or cashing the check to prevent any misuse if the check is lost or stolen. A special endorsement is when the payee signs the back of a check and designates a specific person or entity as the recipient, limiting the negotiation of the check to that designated party.
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Depending on the specific ATM, there may be an envelope you need to use for your deposit. Some banks require extra work with mobile check deposits, which means adding “For Mobile Deposit To [Bank Name]” or something else to your endorsement. Your bank’s app may provide these instructions, or you can contact your bank prior to preparing your deposit. Writing a check to yourself is another way to withdraw cash from your bank account or transfer money between accounts.
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this post may contain references to products from our partners. 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. The first step is to write the business’s name on the back of the check. Be sure to write the name exactly as it appears on the “pay to the order of” line. The bank then has the right to act on your behalf and negotiate the check.
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. Understanding the proper way to endorse a check can mitigate these risks. A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation. Someone on our team will connect you with a financial professional in our network holding the correct designation and expertise. Choosing the best endorsement for a check requires careful consideration of individual needs and circumstances. Verification can be achieved through identity checks, transaction confirmations, or even simple direct communication with the involved bank.
When To Endorse a Check
Therefore, it’s crucial that the payer gets this information correct, when they’re filling out the check. Before we dive into some tips for endorsing checks, it’s important to understand what each section of a check represents. When you hand the bank a check for deposit, you’re giving consent to have those funds put into your account. Endorsing a check may seem like a straightforward process, but it’s crucial that you make sure it’s done correctly.
When is the best time to endorse a check?
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. Wise allows users to easily and statement of account definition securely send money online or through the Wise app, often in a matter of seconds. Sending and receiving checks can be a headache and one that’s easy to avoid. That way, there’s less risk of the money falling into the hands of someone else.
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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. This means if the date is miswritten, or it appears as though the check is more than six months old, the recipient cannot cash it. Errors in the payee’s name will also prevent you from cashing the check. If your name isn’t spelled properly on the payee line, the bank may still allow you to cash or deposit it if you endorse it properly.
Restrictive Endorsement by Account
On the other side, its openness means that if the check is misplaced, anyone who picks it up has the ability to cash or deposit it. This leaves room for potential fraud, especially if the check is of significant value. In 2018, new banking regulations mandated the endorsement of electronically-deposited checks using Remote Deposit Capture (RDC) technology. Some institutions encourage you to write an account number when endorsing the check. Make sure you understand and comply with your institution’s policies.
A mobile check deposit without an endorsement is likely to be rejected, even if initially accepted from your phone. One way to keep track of the checks you write is to record them in the paper check register that comes with a standard order of checks. This is often the case with checks that are given as wedding gifts. Should the other person not be available to endorse the back, most banks will allow you to endorse the back with “for deposit only” and then deposit the check into an account. However, the account must usually be a joint checking or savings account that belongs to both of you. Banks and credit unions regularly accept unendorsed checks and assume that no problems will arise.
With mobile banking on the rise, it’s more common than ever to make a mobile check deposit via a banking app. To make this deposit, write “For mobile deposit only,” after your signature. Your bank may also require you to write its name in the endorsement area. Only make a mobile deposit through your bank’s mobile app, and not a third party app, to protect your money. Keep in mind that what someone can do with signed-over checks is limited. Most businesses won’t accept third-party checks as payment for goods and services.
One exception to this rule is a certificate of deposit (CD), a savings account that pays a relatively high interest but restricts withdrawals for a time period lasting from 30 days to five years. In general, the owner of a CD account must give notice prior to withdrawing funds before the time limit expires. Even then, the bank may charge a fee and even a penalty for the early withdrawal. Make sure that all checks are properly signed and to communicate with your bank about their policies on check handling.