Knowing how to endorse a check under different circumstances will prepare you for smoother transactions every time you need to deposit a check. An endorsement ensures that nobody else can cash a check made out to you. While the basics of endorsing a check are simple, there are slight variations depending on what you want done with the money that the check represents.
What Is Endorsing A Check?
Endorsing a check is the act of putting your signature on the back of a paper check to let a financial institution know that you are authorizing the transaction. Most checks today have a special section on the back of the check for endorsements, usually indicated by two or three horizontal lines. A financial institution generally will not cash out or deposit a check if there is no endorsement on the back.
Endorse A Check For Yourself
To cash or deposit a check made out to yourself, such as a paycheck or gift check from your friend, simply turn the check over, and put your signature on the endorsement line. Your signature must be your full name and be written in ink. This act proves that you are the person to whom the check is written.
Endorse A Check For Someone Else
When a check is made out to you and you wish to allow another person to deposit it into his account, you can endorse it to that person. This is called a restrictive endorsement, and means that you are permitting a specific person to deposit a check with your name on it. In order to do this, simply write "pay to the order of" and write the person's full name. You must also include your own signature below that notation. Some financial institutions may not deposit a restrictive endorsement check, as it is quite easy to commit fraud that way.
Endorse A Check For A Company
Companies, such as retail stores, process a lot of checks in any given day, so to speed up the endorsement process, many companies have stamps made up with the company's name on it and other relevant information. The stamp is an acceptable substitute for a signature when checks need to be deposited. Financial institutions will generally not provide cash to the depositor with stamped company checks.
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