For many people, checks are a thing of the past – but not forgotten. While they are no longer as common as they once were, you may receive a check as a payment, a gift or as a refund and, consequently, you will need to know how to endorse the check for deposit only. But what does it mean to endorse a check? And how do you deposit it?
Types of Endorsement
There are three primary types of endorsements: blank endorsements, restrictive endorsements and endorsements in full. According to U.S. News, a blank endorsement simply means that the check is endorsed with the payee's signature and does not contain further instructions for the bank. In contrast, restrictive endorsement includes the signature and other instructions, such as "for deposit only."
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Through restrictive endorsements, the only action the bank can take is the action indicated on the back of the check – for example, if a check has a "for deposit only" stamp, the bank can only deposit the total amount and cannot cash out a portion. Endorsement in full refers to a third-party check that has been given to someone else. This person can then endorse the check, then cash or deposit it. This is done by including "pay to order of" and the individual's name in the endorsement space, then a signature. Huntington notes that this endorsement method is not considered good practice but can be completed by a bank, nonetheless.
However, some banks and check-cashing businesses have a policy against accepting third-party checks in order to decrease the risk of fraud. To ensure the check is deposited, it's always best to check if the payee's bank or business accepts third-party checks beforehand.
Endorsing a Deposit-Only Check
Fortunately, banks make it simple to endorse a deposit-only check. On the back of the check, toward one of the check's edges, are a few faint lines, one of which has an X. Some checks may also say, "endorse here," while others may leave it blank. Regardless, this is where you will endorse the check.
Sign the check beside the faint X or "endorse here" in blue or black ink, never pencil. You may notice some checks have "do not endorse here" or "do not sign here" warnings below the endorsement line. This is because the bank also uses the back of the check to hold its check-processing data.
To ensure that the check is only deposited and goes into the right account, you may go even further by using the restrictive endorsement method. This can be done by writing "for deposit only to account number" in the endorsement area (and include the account number). This way, you know the check will be deposited into the right account. Finally, endorse the check by signing your name below your instructions (remaining in the endorsement area).
What to Know Before Depositing a Check
Remember not to endorse a check until you are ready to deposit it. Many people choose to wait to sign the back until they are at the bank and are about to make a deposit. This is to help prevent fraud. Once the "endorse here" line has been signed, anyone can deposit the check at the bank, even if they did not provide the signature.
It is also essential to remember that signatures and names matter. Always make sure that the name indicated in the "pay to the order of" portion of the check matches the payee's endorsement name.