How to Endorse a Check

A Useful Guide to Check Endorsement

Now that you understand what check endorsement is, and what each section of the check represents, let’s discuss some useful tips to keep in mind when you’re endorsing checks:

1) Always Double-check Your Check

There are several things to monitor, to ensure your transaction goes as smoothly as possible, and you’re always protected.

Everything from making sure that the check is filled out correctly, to making sure it isn’t modified after your endorsement. The last thing you want is to go all the way to the bank, only to find out that the check is invalid.

Some of the most common reasons a check is refused include:

• The written amount doesn’t match the numerical amount.
• The check has a spelling mistake or can't be read (incorrect spelling or illegible writing also makes mobile deposits more likely to fail)
• The check isn’t dated, or the date is wrong. 
• The check hasn’t been signed or endorsed.
• The signature is notably different from the one the bank has on file.
• The check has been altered. If the check appears to have been changed with scratch-outs, write-overs, different-colored inks, or multiple handwriting styles, it will be rejected. Even if you made the changes.

If you find that the check isn’t legitimate, it’s best to destroy it right away. Or, you can allow the bank to take care of it. Then you should write/request a new check.

2) Only the Payee Can Sign/Endorse the Check

Whoever is listed as the payee on the front of the check, is the only person authorized to sign it. Therefore, it’s crucial that the payer gets this information correct, when they’re filling out the check.

However, there are some key things to note:

• How the check is addressed, determines how many signatures you need.

For example: 1 name = one signature; 2 names with an “&” means both of the named parties are required to sign; 2 names with “and/or” means a signature from either one is acceptible.

• If the check is addressed to your LLC or business, then you need to make sure that the person who signs the business check has signing authority, and that their signature matches the one the bank has on file.
• Every bank has preferences above what the Federal Reserve mandates. They may have practices or specific rules around how to endorse a check, add protections to it, or sign a check over to someone else.

3) Don’t Rush Signatures/Endorsements

Most checks have an “Endorse here” area, or a specific box on the back of the check. Whether you’re doing it via mobile or in person, make sure you write in the information neatly and within the lines.

When the writing is illegible, or the signature isn’t contained within the allotted area, the bank could refuse the check. You can save yourself the hassle of having to write a new check, by taking the time to write information clearly the first time.

If you’re signing the check over to someone else, you need to write “Pay to the Order of [recipient name]” below your signature. It’s best to do this with a black or blue pen, and include your job title to demonstrate you’re authorized to make this change.

4) Add Additional Restrictions to Checks

If you want to ensure a check can only be cashed by a specific person, or you’d like it deposited into a specific account, you should always include additional protections.

Don’t leave things up to chance. 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.

This way you’re protected after the check is out of your hands, and you can avoid a possible security risk.

Finally, sign your name below the restriction. By doing this, you officially authorize the protection. It’s important to note that if you sign the check anywhere except below the restriction, it’s considered invalid.

5) Be Careful When Signing Checks Over to Someone Else

Also known as a third-party check, this is where the original recipient of a check signs it over to a third person.

This is an easier alternative to depositing the original check addressed to you, and then writing a new one to pay someone else (i.e., a supplier, a vendor, etc.).

However, before you consider this, find out if both your bank and their bank allows this. Some banks don’t accept third-party checks.

If both banks allow third-party endorsements, then you can endorse the check by signing the back of it, and then writing “Pay to the order of [person’s first and last name]” under your signature.

Coordinate with the person to find out which bank the deposit will go into. The bank might require you to go with the payee, to assure the bank that there’s nothing suspicious about your transaction.

6) Depositing Checks Involves More Than Just a Hand-off

Whether you’re just endorsing the check, adding protections, or signing it over to a third party, this is your last stop.

Once signed, an endorsed check with no restrictions becomes a “bearer instrument”, meaning that it’s immediately cashable. If you lose it, that becomes a major problem.

You also can’t forget about the lifespan of a check. On average, the lifespan of a check is 6 months or 180 days. However, some checks may have “void after 90 days” preprinted on them. It all depends on the banking institution that issued the checks.

If you choose to put some protections/restrictions on your check, then it can be deposited at any time, within the lifespan of the check. Once endorsed, the bank will only deposit it into the account of the listed payee.

With all of these factors in mind, it’s best to develop some good habits for making deposits, such as:

• If you’re taking the check to the bank, don’t endorse it until you get there. You should always do this in front of the teller, or right before you deposit it into an ATM. This reduces the risk of losing a fully endorsed check that has your name and account number on it.
• If someone else is taking the check to the bank for you, then after you endorse it, you should put it into a sealed envelope.
• Consider cutting out the entire physical bank deposit, and do your deposits directly through your bank’s online platform or mobile banking app.

7) There are Benefits to Mobile Check Endorsement & Deposit

In today’s digital age, almost every financial institution has gone through a digital transformation and adopted fintech solutions, including offering mobile banking solutions through an app.

Depositing through mobile is as simple as taking a photo of the front and back of your check, and then the pending deposit will show up in your account, assuming you’re authorized to make the deposit.

With that said, there are some key things to monitor:

• Make sure your endorsement stays within the endorsement area. You’re no longer relying on an objective person to allow the check for processing. These apps rely on an algorithm that records whether the endorsement is within a defined area or not. There’s no room for error.
• It’s best to include “For mobile deposit only” in the endorsement area. This is mandatory for some banks. Checks that don’t include it could be rejected.
• Most importantly, follow directions. Apps are constantly being updated and improved. Processes can change from one version to the next. When the bank offers you updated mobile deposit information, read it and take note of any policy changes, before you make any future deposits.