On receiving a check, you should endorse it right before depositing it in your bank account. By gaining an insight into how to endorse a check to someone else, the process of check endorsement becomes fairly easy.
You might sign the check potentially to some other individual. However, this practice has various pitfalls. When everything goes well, someone else might use a check that is solely produced for you.
A lot of banks let you sign a check over to others which is also called a “third-party check.” In order to sign or endorse a check to somebody else, one might have to go through various steps which are discussed in this article.
Step-By-Step Guide To Endorsing A Check
Endorsing a check is a simple process, provided you follow these steps:
Verify the information provided on the check
Prior to endorsing the check, ensure that it has all verified information and something acceptable by the bank. If the individual who handed you out the check has made a spelling error in your name, you can return it. Instead, ask for a check without any spelling mistakes.
Various banks accept checks that have a changed spelling as long as the individual making the change signs it. However, a lot of financial institutions find this activity suspicious. To be on the safer side, ask the payee to hand you out another check. You’ll find both the account and the routing number at the bottom of a valid check.
Inspect who is going to endorse
Suppose the payee line present on the check has just your name; then your signature will do the job of depositing the check. However, if there is somebody else is also listed, they will have to sign it only if there are words like “and” or “&.”
The rule of thumb is that a check having more than 2 names can be deposited or cashed by anyone of the payees listed. If the check endorsement is done to you with a “℅” symbol, the bank will need just your signature. They usually cannot deposit or cash the check without having your initials on it.
Locating gray lines at the check’s back
You might find 3-5 gray lines when you turn over the check. These are usually located on its upper short portion, where you might also notice a solid line having instructions written. The instructions say not to go beyond the line while writing.
The financial institution might need the blank space right under the endorsement section for documenting the check processing. Ensure your signature does not exceed the limited space because the bank might refuse to accept the check.
Sign your initials on the gray lines
Once you discover how to endorse a check to someone else, the bank might ask you to put your signature on one of the gray lines. While endorsing, you might have to just put your signature using black or blue ink. Ensure you have the same name as your government-issued ID or bank account.
While signing a business check, don’t forget to include the name of the business right above your name. You might also want to combine your job title to demonstrate your authorization to deposit or cash the check in the company’s name.
Deposit Or Cash The Check Quickly
After signing the check, it will turn into a “bearer instrument.” This means anyone who locates it might cash it. So, if you are walking to the bank, don’t sign the check until you hand it to the bank authorities. You might have to present your government-issued photo ID when you go there to encash or deposit it.
Don’t forget to inspect cashing services that are going to charge a fee for cashing the check. Banks usually charge a small fee, but not if you have an account there already. If you know how to endorse a business check, you must be very familiar with this process.
Inspect The Bank’s Policy On A Third-Party Check
If you know what does it mean to endorse a check, you are halfway there. Banks usually do not have to accept the signed checks which are made out to somebody else. As a matter of fact, a lot of banks don’t accept these checks.
Before signing the check to someone else, make sure you call the bank and check whether they accept this mode of check endorsement. You might want to talk to the individual you are signing the check to and inspect what service the bank is using to deposit or cash the check.
Include “Pay to the Order of” On The Endorsement Line
With the help of black or blue ink, write in clear words, “Pay to the Order Of,” on top of the endorsement zone. Ensure you leave ample space for both the person you are signing out the check as well as yourself.
In doing this, you are turning out your check into a new check effectively. The individual you sign this check to will also have to put their initials. This is right after they learn how to endorse a check to someone else.
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