What Is a Countersignature of Checks?

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A countersignature is a second, additional signature on a legal document. It's common on contracts or agreements that dictate that money will be changing hands pursuant to its terms, and sometimes business checks and personal checks must be countersigned as well. Checks can't be cashed or deposited into a bank account without this extra signature in some cases.

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Merriam-Webster defines a countersignature as one "attesting the authenticity of a document."

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Why Is a Countersignature Necessary?

A countersignature on a check or legal document indicates that both signers are in agreement as to what the contract provides or what will be done with the check in question. The second individual to sign may be confirming the identity of the first signer in some cases and that the first signature is authentic.

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Checks That Require Countersignatures

Several types of transactions commonly require the countersignature of checks.

Third-Party Checks

A third-party check is one where someone has paid you by check and you want to sign it over to someone else – a third-party payee, someone whose name doesn't appear on the check as it was written. Many banks and check-cashing services are reluctant to accept these checks due to the possibility of fraud.

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Traveler’s Checks

The same individual signs and countersigns this type of check. The first signature is placed on the signature line at the time the traveler's check is purchased. Then the individual purchasing it must sign it again to cash it or pay someone with it. The second signature is compared to the first to confirm that they match.

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Cashier’s Checks

Cashier's checks can also require a countersignature to guard against fraud. Like a third-party check, they are signed by both the issuer of the check and by the party accepting it. The issuer of the check may be required to sign twice to confirm that their signature is indeed their own.

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How to Countersign a Check

Countersignatures are made on the back of a check along with the original signature. A few extra words are required in the case of a third-party check. You must first sign or endorse the check that you want to turn over to someone else, then write "pay to the order of" and the individual's name beneath your signature. The recipient of the check would then sign their name and endorse it – the countersignature – below this information.

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It's recommended that the recipient of a third-party check call ahead to their bank, credit union or financial institution to determine if it accepts these checks and if it has any additional requirements for cashing or depositing them. The individual who gave them the check might have to appear in person along with the recipient to provide ID and other confirmation that signing it over is their intention.

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Don’t Spend the Money Yet

You might want to wait a bit and give it a few business days before you tap into the money provided by a countersigned third-party check you've deposited into your bank account. Even banks that do accept these checks may put a hold on the funds until it can be established that the check is good and not fraudulent.

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Call the bank to make sure the check has cleared before you swipe your ATM card or write a check to someone else for the amount you've deposited. You could find yourself on the hook for a whole host of issues if there's a problem with the check. You'll probably be hit with an overdraft fee if you spend the money before the check has cleared so you're left with a negative balance if it isn't honored. A business that accepted payment from you might charge you a fee as well if your payment bounced because the third-party check wasn't honored by the issuing bank.

You might also find yourself responsible for having to pay the amount of the check back to your bank from your own funds.

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