How to endorse a check: A simple tutorial

How to endorse a check: A simple tutorial

We live in an era where the rate of fraud has increased, and not even new technology can keep our money safe. The main precaution we can take is being careful when handling cash matters to avoid falling victims. It is, therefore, crucial to learn how to endorse a check. Which is the most secure type of endorsement to use? When is the right time and place to sign the document?

How to endorse a check
Image: pixabay.com
Source: UGC

The use of checks as a method of payment and clearing debts is still prevalent in several parts of the world. A good number of people find it cost-effective and straightforward compared to cash and electronic payment methods. It can also serve as a source of evidence of a past payment. What does it mean to endorse a check to someone? Who is supposed to make all the approvals?

How to endorse a check

It is difficult to deposit a check in your bank account and get paid without approval.Banks will not process it, since doing this will be going against their laws. Endorsing a check document is a simple process that requires only the signature of a payee at the back. The signature must match the name on the front side.

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You may also be required to provide additional information as stipulated by the bank. All you need is to stick to the rules and instructions provided to legalize the transfer of money to your account. Here are the most common ways on how to endorse a check for depositing.

Endorse check
Image: pixabay.com
Source: UGC

Blank endorsement

The main advantage of this method is that it does not have restrictions. The simplest way to write this is by signing your name at the back of the document. The credentials should be the same as it appears on the front to get your money processed. Sometimes, more than one name may appear on the front in the “Pay to the Order of” section. In this case, if the word ‘and’ is used between the two or more names, then all the listed people must sign. On the other hand, if you use the word ‘or’ only one person can sign to approve it for deposit.

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Note that blank endorsement is the most dangerous way to endorse a check since anyone can transfer money into their account once they have access to it. You can use it only when about to deposit or when you are at the bank or financial institution. Walking around with it is risky because someone else can steal it from you and transfer the money to their accounts.

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Restrictive endorsement

If you ever thought of the safest method to endorse a check, then restrictive endorsement turns out to be the correct and perfect choice. What you need to do here is write your account name and account number (varies with a bank) after the ‘For deposit only” statement. Doing this confirms that you are the only payee authorized to deposit the amount by signing at the back of the document. In this type of endorsement, you can only cash in checks in specified accounts; therefore, restricting thieves from accessing the money.

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Where an account number is involved, begin with the words ‘for deposit to account number’ followed by the receiving account. Some banks, however, do not allow customers to write their account numbers as part of their security measures.

Check endorsement
Image: pexels.com
Source: UGC

Special endorsement

Unique as its name suggests, it involves endorsing a check to someone else. In this case, only the person assigned to it can make a deposit. To write this, you must include the words “Pay to the order of” at the top followed by the name of the person you are recommending. Your signature should come below the specified name.

You may be wondering about the importance of learning how to endorse a check to someone else. Some companies pay their employees, contractors, and other third parties through special endorsement. Maybe your employer may someday pay your expenses through this means, and without knowing what to do, you may end up stranded. A company can also decide to issue it to a contractor who may also use it to pay workers. The worrying part is that not all banks accept this kind of endorsement. It is, therefore, crucial to understand the policies of an institution on third parties before you endorse check to someone else.

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Check endorsement
Image: pixabay.com
Source: UGC

Using the electronic/mobile system

New technological advancements have brought several improvements in the banking industry. The mobile check system has progressively replaced regular paper documents. You do not have to visit a bank teller since you can deposit electronically using the Remote Deposit Capture (RDC) system. The new system allows you to scan the check from wherever you are and send the image to the bank for processing. It usually is done through a bank app with a stable internet connection. In most cases, banks recommend photos of the back and front sides.

To endorse a check for mobile payment, you must include the phrase “for mobile deposit only” on the back before or after your signature. You can enjoy numerous advantages of endorsing a check using the electronic/mobile payment system. You can save your time and deposit even at odd hours. It is also a quick and convenient way of transacting money. Most banks do not charge customers for using the mobile payment service.

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Endorse a check to someone else
Image: pexels.com
Source: UGC

Depositing checks after endorsement

What do you do next after endorsing a check with your signature? The remaining transaction will take place at the teller where you will be required to fill a deposit form. Information in the deposit form will be verified before the processing begins. The money will be deducted from the payer’s (check writer) account and wired to your account within a stipulated number of business days.

There are instances where the amount of money written by the payer is more than his/her bank balance, therefore the check bounces. In this case, you cannot get the amount you want and also may find yourself in legal trouble. All you need is to convince the authorities that you are not the one who wrote it and contact the payer to make necessary changes. You may also decide to demand an alternative method of payment from the payer and get your money fast.

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Now you know how to endorse a check for depositing. The safest way to ensure smoothness in bank operations is to stick to the rules and follow instructions to the latter as recommended by your financial institution.

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Source: Legit.ng

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