This prevents anyone else from cashing or depositing the check into an incorrect account or institution. 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. Keep in mind that banks take a risk when they cash this kind of check, because anyone can find a signed check and fill in the endorsement information. For this reason, not all banks and credit unions will accept checks with a special endorsement. If your bank or credit union does accept a third-party check, you may need to visit the bank in person or wait a few days before the funds are available.

  • Sending and receiving checks can be a headache and one that’s easy to avoid.
  • The check may “clear” your account right away if the funds are available but the checks in these situations are usually fraudulent.
  • A third-party endorsement involves signing over a check made out to you to someone else.
  • Consult with your bank about its processing policy if you receive a check like this.
  • When a check is made payable to your business, the back of the check should be endorsed with the name of your business.

If you want to endorse a check quickly, all you have to do is sign above the line on the back of the check and leave it at that. It is possible to sign a check over to someone else, but it’s often ill-advised. There are different ways to endorse a check depending on how the check has been written and what you plan to do with it. You usually need to sign your name, but how to file federal income taxes for small businesses you may want to add other information depending on what you want to do with the check. There are several ways to endorse a check, and how you endorse a check depends on what you want done with the money and how the check needs to be filled out. The video shared on social media, however, edited the above footage, splicing out some information and mixing other remarks.

Restrictive Endorsement

Learning to endorse a check is a basic part of financial literacy, so be sure you know how the system works. 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. Instead of depositing or cashing the check yourself, you can sign a check over to another person. In this situation, you will use a full endorsement, also known as a special endorsement or a third-party check endorsement.

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict
editorial integrity,
this post may contain references to products from our partners. 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. If you decide to do so, you’ll need to check with your bank first to make sure it’s possible.

  • Keep in mind that certain types of checks may require an endorsement even if your bank doesn’t.
  • If you endorse the check, it legally authorizes them to debit your account, if the check is later returned for non-sufficient funds (NSF).
  • This compensation may impact how and where products appear on this site (including, for example, the order in which they appear).
  • This method is more secure than a blank endorsement because it limits what can be done with the check — the only option is to deposit it in the account.

Customer deposits, including checks using any variety of endorsement methods, provide banks with the ready cash to make loans. Commercial banks make money by providing loans and earning interest income from those loans. 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. That means you don’t have to take a trip to your bank just to take care of a check!

Most commonly, such an endorsement occurs when a government official, an influential person, or an organization expresses their support for a political candidate. Insurance endorsements are amendments in the form of modifications–or additions–to the original policy. For example, a policy provision continuing monthly income to a beneficiary after the death of the insured is an example of an endorsement and is also known as a rider. Typically, this type of endorsement increases the policy premium due to the added benefits to the policyholder and beneficiary and the increased risk to the insurer.

What is your current financial priority?

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. Sometimes a check will be made out to a business rather than to an individual.

Advantages of a Checking Account: Financial Freedom at Your Fingertips

Errors in endorsement can cause delays or disputes in check processing. Moreover, with the increasing use of digital imaging in banks, endorsed checks can be stored and retrieved digitally. This aids in record-keeping and provides easy access to transaction history. Ask your bank or search its website for specific instructions that apply to mobile deposits, if you’re not sure.

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. When you are writing a check for someone you have to sign your name on the signature line on the front of the check, in order for the check to be useable. If that signature is missing, then the check receiver won’t be able to cash or deposit that check. Your signature is needed to give the check receiver permission to take out those funds from your own account.

tips for using mobile check deposit

Most institutions include a 1.5-inch line on the back of the check proceed by a note that reads “Endorse Here” or “Endorse Check Here” known as the endorsement area. When endorsing a check for mobile deposit, be sure to do your best to keep your signature on the line and any other necessary information in the endorsement area. When you receive a check, it is like you are handling cash (with a few more details). When you hand over a check to the bank, you are authorizing the check to be turned into cash that is either placed in your hand or directly into your bank account.

That way, there’s less risk of the money falling into the hands of someone else.

An improperly endorsed
check could make your business vulnerable to fraudulent activity. Using a mobile app to deposit a check makes the process quick and easy when done correctly. But an endorsement done wrong can lead to complications or even fraud. Guidelines on endorsing a check may vary depending on the financial institution you are using.

You can also write “for mobile deposit only” if you wish only to be able to cash the check via mobile deposit through your personal banking app. This signature is written before the check is transferred to the payee’s bank. For example, a “for deposit only” endorsement ensures that the payee’s bank must deposit the funds into the payee’s account. If the endorsement is a blank endorsement (such as when it is made payable to Cash), the check becomes a negotiable instrument and can then be used by any other party. There are several types of endorsements that may be applied to a check, as noted next. This is usually done when some other entity will be depositing those funds from their own account and handing them over to you at a later time.

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