It depends on how the check is written: If the word "and" appears between names, everybody needs to sign. If you run a business and accept checks, endorsing is slightly different. The check is payable to the business—not to you, the individual who owns the business—so you need to sign on behalf of the business.
Anybody else who endorses these checks needs to be authorized to handle funds for the company. 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. The custodian will handle the check, and you generally would not need to endorse it. When you get paid with a check, that payment is made to you. You're the only person who can legally collect money from the checkwriter's account.
However, the easiest way to cash that check or deposit money you can later spend from your checking account is to hand it over to your bank and let them deal with it. By endorsing a check, you authorize the bank to collect payment.
The bank then has the right to act on your behalf and negotiate the check. Again, you can potentially deposit a check without endorsing it. Assuming the check is small enough, you deposit it into an account that matches the payee name , and it's not from an insurance company or other organization that requires endorsement, this may be an option. Banks and credit unions regularly accept unendorsed checks and assume that no problems will arise.
That said, if it's essential that you get paid quickly, it is safest to endorse checks properly and thoroughly. Even if your bank allows you to deposit a check, that check could come back in several weeks, resulting in the bank removing those funds from your account until everything gets cleared up. No matter what method you use to endorse checks, wait as long as you can before signing a check. If you endorse checks and they subsequently get lost, it's easier for somebody else to cash the check or try and deposit the check in their account.
Now that you know what it means to endorse, figure out the best way to deposit checks. With ATMs and most mobile devices, you can often skip the teller line. You may also be able to eliminate paper checks altogether by getting paid electronically. Ideally, you should wait to endorse a check until just before you deposit it. That's the best way to prevent someone from fraudulently depositing a check made out to you. If you do endorse it early, be sure to add a restriction such as "for deposit only" under your signature.
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Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can. Not all banks will allow you to sign a check over to someone else.
Several factors may affect your ability to sign a check over to someone else. There are a few reasons why you may want to sign a check over to someone else. Paper checks are used less and less often nowadays, so a little refresher course in check endorsement is wise. An improperly endorsed check could make your business vulnerable to fraudulent activity.
At the very least, it could delay your funds. Easy enough. How you endorse a check depends on the type of check it is and how you want to use it. In most cases, however, endorsement is necessary for the issuing bank or financial institution to settle the funds associated with the check. The way you choose to endorse a check depends on what you want to do with the cash associated with it.
First, though, a general word of warning about check fraud. The reason why banks require you to endorse checks is in order to prevent fraud. Signing the back of a check helps to confirm your identity. However, it is possible for criminals to intercept your check before it is processed, alter the endorsement, and thereby steal the money associated with it.
Because of this, you should limit the time between endorsing it and having it processed. This gives criminals the smallest possible window in which to steal it. You endorse a check by signing the back of it. To make one, you should, in any order:. There are other ways to endorse a check, but this is the most secure because it instructs your bank that funds should only be sent into the account you have specified.
One slight problem with using this method is that the person who gave you the check might be able to see your bank account number because they might receive a copy of the canceled check via their own bank. The best option is to stick with the procedure above. Wait until the last possible moment to endorse your check, so that it cannot be intercepted before it is processed.
Doing this helps to guard against check fraud. These include:. Essentially, you are sending the money associated with the check directly from the payee to someone else. This is known as a special endorsement. Write the following in the endorsement area:.
Your chosen recipient would then have to sign their name beneath yours before depositing or cashing the check. If you try to endorse a check in this way, your bank will probably tell you to deposit the funds into your account first, and then send them in a different way.
To do this you simply sign your name on the back of the check and then tell the bank teller whether you want to deposit it to a particular account or cash it. You can also use a blank endorsement when you deposit a check via mobile deposit or an ATM.
This is not a very secure way to endorse a check, but if you sign it just before you deposit it, you can limit the possibilities for fraud. Sometimes a check will be made out to a business rather than an individual.
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