Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. A special (third party) endorsement is one in which you sign the check money off to a third party.
With a restrictive endorsement, you have control over which bank account the check ends up in. There might be a dollar amount limit to this service or a hold on the funds for longer than normal, but some banks will do it. This is not considered a good practice to do, but it can be done. Some banks will not accept third-party checks due to the risk of fraud and most check-cashing places won’t accept them either. This method specifically instructs the bank that the check should be deposited into the account identified in the endorsement.
This form of a check may only be deposited into an account with the name specified on the check. Some banks prefer a check with a restrictive endorsement to have the recipient’s account number written clearly on the check, while others see this as a security risk. A blank endorsement is a signature on a financial instrument such as a check. No payee is specified, so any holder of the instrument could claim payment. The signature essentially turns the instrument into a bearer security. That is, it is not registered to any individual but is payable to the person who possesses it.
Blank Endorsement: What it is, How it Works
The person receiving the check is the one that needs to endorse the check. For instance, if the front of the check on the “Pay to the Order of” line says, “Jane Doe” then Jane Doe is the one who should be endorsing the check. If you are endorsing a check for an electronic deposit then the check will remain in your possession even after you’ve endorsed it. Learn all you need to know about check endorsements in the “How to Endorse a Check” segment in our Check Cashing series. The first step is to write the business’s name on the back of the check.
That means you don’t have to take a trip to your bank just to take care of a check! Now all you have to do is have your bank’s mobile app and you can deposit checks to your account from the comfort of your own home. Some types of negotiable instruments may be commonly presented in the form of a blank endorsement for purposes of facilitating the transfer of ownership smoothly. There are also other settings in which the ability to endorse something without indicating a specific payee can be useful.
- If the check doesn’t specify “and” or “or,” but just lists the names, then follow the same instructions you would if the check were written with the word “and.”
- In some cases, you may need to mail a third-party check instead of handing it to someone directly.
- Certain checks take a full 24 hours to clear entirely, although a portion could be available for immediate use.
- Check with your bank or credit union to see if they allow ATM check deposits and specific instructions on how to deposit a check.
- There are several ways to deposit a check into your bank account.
Unlike a special or full endorsement, the original receiver of the check retains control of it, but earmarks the funds for another’s benefit. 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.
How to Endorse a Check: What It Means to Endorse a Check
Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Peer-to-peer payment apps are a popular method of payment nowadays. You can easily send and receive money by connecting your bank account to apps like Venmo or CashApp. To endorse the check, first sign the check on the endorsement top line. Then write “Pay to the order of” and the name of the third party to whom you want to transfer the check.
However, younger generations are gravitating toward digital payment methods, so this method may not be the most effective depending on your recipient. Check-cashing stores or currency exchanges can help you out with cashing a third-party check. Unfortunately, not every check-cashing company offers this third-party check-cashing service. Discover what FDIC insurance is, its limits, and the types of accounts it covers. Learn if your money is safe in banks, credit unions, and with CDs.
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. Keep in mind that what someone can do with signed-over checks is limited.
A check made payable to one party for the benefit of (FBO) another must be endorsed by the first payee. For example, the check might be made payable to a retirement account custodian for a rollover transaction that’s for the benefit of you. The custodian will endorse the check, and you generally would not need to sign it. For instance, if the check is written out to “Jane Doe and John Smith” then both Jane and John must sign the back of the check to endorse it, and be present to cash or deposit the check.
Endorsing a Third-Party Check
Second, the payee must endorse the check to authorize a second payee to cash it. Any of the three parties may be an individual or a business entity. 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 invoice requirements eu vat approach. Either leave the check unsigned until you’re ready to deposit, or add a restriction to the endorsement. Blank endorsements are risky because somebody else can steal the endorsed check and potentially cash it or deposit it to a different account.
Sometimes you may receive a check that has no endorsement line or box on the back. Simply sign in the usual spot you would on the back and deposit it as you normally would. 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…” below your signature, and name the new payee. 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.
Some banks will require you to add “Mobile Deposit” to the endorsement when you deposit a check using your phone. Some banks will accept other endorsement styles for mobile deposit. Check with your bank to find out if they need a special mobile endorsement. Also, to help protect yourself further from check fraud, wait till you’re at the bank to endorse the check, or if you do a mobile deposit–deposit it right away. This is important to keep in mind because if you lose the check after you endorse it, someone can steal the check and alter the endorsement.
Free Debits and Credits Cheat Sheet
Endorsements provide extra security for your funds so most banks will be reluctant to take a check that hasn’t been properly endorsed. Blank endorsement of a financial instrument, such as a cheque, is only a signature, not indicating the payee. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens.
The first thing we should get out of the way is that check endorsements are for people receiving a check, not sending a check. Before you endorse it, you must ensure that the original check has the correct date, amount, and payee name. Also, confirm that the person has filled out the signature line. In most cases, “endorsement” simply means that you need to sign the back of the check before you can deposit or cash it.
There are a few different methods of endorsement worth understanding, though, that carry different levels of flexibility and security. If a check is made out to a business, the endorsement should reflect the business name. Typically, a representative of the business writes the business name, their title and then signs, confirming the deposit into the business account. For instance, if a minor receives a lawsuit settlement, the check might be addressed to the parent but intended for the child’s use.