How to Endorse Checks

What does it Mean to Endorse?

Endorse a check on the blackboard
Jeffrey Coolidge / The Image Bank / Getty Images

When you get paid with a check, you generally have to endorse it in order to cash the check or deposit it. If you're not sure what that means, you're in luck because it's pretty easy: sign your name on the back of the check – that's all it takes to endorse. However, there are risky and safe ways to do this (see below).

How to Endorse

To be endorsed correctly, the name signed on the back of the check needs to match the payee name written on the front of the check.

If your name was misspelled or written incorrectly, sign it with the incorrect name and then also sign with your correct name.

Where to endorse: checks often have a 1.5-inch section that you're supposed to endorse in. This section, known as the endorsement area (see an example here), is marked with lines and instructions saying "Do not write, stamp, or sign below this line." Try to keep your entire signature and any other instructions in that area.

Blank endorsement: the easiest approach (but also the most dangerous) is to use your signature and nothing else. Sign your name in the endorsement area and be done with it. Known as a blank endorsement, you should only do this if you’re at the bank getting ready to deposit the check. If you’ll mail the check, deposit it at an ATM, or carry it around for a while, do something else: either leave it unsigned or add a restriction to the endorsement.

The risk of a blank endorsement is that somebody else can steal the endorsed check and cash it or deposit to a different account. 

Restrictive endorsement - get it into your account: to ensure that the money gets into your account, it's a good idea to include your account number with your endorsement with instructions saying the money can only be deposited to your account.

To do so, write "For deposit only to account #####" (using your account number, of course), as part of your endorsement. If the check is lost or stolen, it's more difficult for thieves to get the money - they'll need to alter the endorsement. An alternative to including your account number is to write "For deposit only to account of payee" - which does not require that you write down your account number. Depending on the situation, you might or might not also have to sign if you specify an account number.

Sign it over to somebody else: you can try to sign a check over to somebody else (so you can pay that person with the check you received), but it's not the ideal way to pay somebody. To do this, include the words "Pay to the order of..." and name the new payee. Be aware that some banks do not allow this type of endorsement (the technique is sometimes used fraudulently), so check with all banks involved before you try. Learn more about signing a check over and cashing a check for somebody else.

No endorsement: you don't always have to endorse checks. Some banks allow you to deposit checks without a signature or account number on the back. This keeps your information private - nobody can see your signature or your account number unless your bank adds the account number (you can often see the endorsement on any check you write online after the check is paid).

 For extra clarity, you can still write 'for deposit only' (but technically this is still not an endorsement). 

Who Signs to Endorse?

In some cases, it's not clear who should sign the check. Again, the person receiving the check needs to endorse it. The person who wrote the check already signed on the front.

Checks payable to multiple people: if a check is payable to you and somebody else, how should you endorse it? Does everybody need to sign, or just one of you? It depends on how the check is written: if the word "and" is used, everybody needs to sign. See an explanation with more examples here.

Checks to your business: if you run a business and get paid by check, endorsing is slightly different. The check is payable to the business - not to you as an individual - so you'll need to sign on behalf of the business (of course you'll need to be authorized to handle funds for the business).

See complete details on endorsing checks to your business.

FBO checks: 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.

Why do you Need to Endorse Checks?

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 check writer's account. However, the easiest way to turn that check into cash (or money you can spend from your checking account) is to hand it over to your bank - and let them deal with it.

When you endorse a check, you authorize the bank to collect payment; the bank has the right to act on your behalf and negotiate the check.

Again, you can 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). Banks and credit unions regularly accept unendorsed checks and assume that no problems will arise.

If it's really important that you get paid (quickly), it is safest to endorse a check properly and completely. Even if your bank allows you do deposit a check, that check could come back in a week or two (and funds would be removed 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 - it's best to sign while you're at the bank. If you endorse checks and then they get lost, it's easier for somebody else to try and deposit the check in their account (or cash it).

Now that you know what it means to endorse, figure out the best way to deposit checks. With newer ATMs and most mobile devices, you can often skip the teller line (and even the paper check itself):