Endorsing a check, how hard can it be? The good news is that it is easy, but it’s important to be sure that your check is properly endorsed. It will decrease any holdups with the money being transferred to your small business’s mobile bank account and it prevents fraud. 

When you receive a check, it is like you are handling cash (with a few more details). When you hand over a check to the bank, you are authorizing the check to be turned into cash that is either placed in your hand or directly into your bank account. The step of endorsing a check with your signature, whether at the bank or using a remote device, is a security measure. It helps to verify the proper recipient and allows the bank to complete the transaction.

 Here is everything you need to know about endorsing a check. 

How to Endorse a Check: Basic Tips

Although endorsing a check may seem pretty straightforward, there are a few things that are important to remember before your signature is on that check. Here are a few quick tips:

Check Your Signature 

When you sign a check for endorsement, it is important that you check that the name on the front of the check matches the name you sign on the back. For instance, if the check is made payable to “Ms. Smithe,” but the correct spelling of your name is “Ms. Smith,” the back of the check should be signed with the incorrect spelling followed by the correct spelling below.

Look for “Endorse Here”

Most institutions include a 1.5-inch line on the back of the check proceed by a note that reads “Endorse Here” or “Endorse Check Here” known as the endorsement area. When endorsing a check for mobile deposit, be sure to do your best to keep your signature on the line and any other necessary information in the endorsement area. 

Know Your Bank’s Guidelines 

Guidelines on endorsing a check may vary depending on the financial institution you are using. Knowing your bank’s specific guidelines helps to ensure that you are endorsing the check correctly. 

Tips for Mobile Deposits 

With today’s technology, depositing a check is quick and easy. With a mobile-first digital bank like NorthOne, mobile deposits are easier than ever before. Here are a few tips that will help your mobile deposit go smoothly. 

Wait to Endorse The Check 

For security purposes, it is important to wait to endorse the check until you are ready to complete the deposit. An endorsed check becomes negotiable, which means it can be cashed or deposited by anyone, even if that person isn’t the payee.

Include “For Mobile Deposit Only”

If you are endorsing a check for mobile deposit it is recommended that you include the phrase “for mobile deposit only” in the endorsement area. In fact, some banks require this, and checks that do not include this phrase will be returned with a notification stating “deposit was rejected due to restrictive endorsement.” 

Double Check Your Check

Using a mobile app to deposit a check makes the process quick and easy when done correctly. But an endorsement done wrong can lead to complications or even fraud. Do your due diligence and double-check your check. 

Follow the Instructions

When using a mobile device to deposit a check, be sure to follow the instructions on the app. Although most of the time the instructions are straightforward, apps are constantly changing and being improved. NorthOne’s mobile deposit process is simple! In order to endorse your check, all you have to do is snap a clear picture of the front and back of your check. You’ll immediately see your pending deposit show up in your account! 

3 Types of Endorsements

There are three main types of endorsements and each type of endorsement has its own rules for depositing the check. Before you sign the back of a check, it is important to know which type of endorsement you should be using in order to ensure you include the correct information.

1. Blank Endorsement

A blank endorsement is made when the back of a check is signed without any added restrictions. Because a blank endorsement check can be deposited by anyone (even if their name is not written on the check), this method is best used when the check will be deposited immediately, like while using a mobile banking app. 

2. Restrictive Endorsement

A restrictive endorsement ensures that a check will be deposited into a specific account. Adding a restriction such as “for deposit only” or “for mobile deposit only” to the endorsement area helps to reduce the risk of the money being stolen if the check is lost. In fact, some institutions now require this to be written on checks before they are deposited. 

3. Special Endorsement

A “special” endorsement allows the payee to make the check payable to another person. For example, if Ms. Smith wants to make the check payable to Mr. Smith, she would write “Pay to the order of Mr. Smith” on the back of the check-in the endorsement area. Because there is a potential risk of forgery when using special endorsement, banks are discouraged from cashing these types of checks unless the payee is present. Using a mobile banking app to deposit a special endorsement check helps the bank to legitimize the payment and protect your account from fraud.

Who Endorses a Check?

In some cases, it can be tricky to figure out who should be endorsing the back of the check. But just like any other check, the person receiving the check needs to be the one to endorse it. 

1. Endorsing a Check for Multiple People 

When endorsing a check that is written to multiple people, it is important to look at the pay-to line on the front of the check to look for the words “and” or “or”. If a check is made out to “Ms. and Mr. Smith” both parties will need to sign the check. If the check is made out to “Ms. or Mr Smith” either party can endorse the check. Just like when endorsing a check written to one person, it is important that when endorsing the back of the check the signature matches the spelling on the front of the check on the pay-to line.

Now, if the check was made out to you but you’d like to sign it over to someone else, this is possible. However, signing over a check to someone has its own process that you’ll want to look into.

2. Endorsing a Business Check

If you are endorsing a check made out to your small business is only slightly different from endorsing a check made payable to you. When a check is made payable to your business, the back of the check should be endorsed with the name of your business. Other information to include when endorsing a business check for mobile deposit includes your name, position and any further restrictions. 

3. Endorsing a Check For The Benefit of Another

A check that is made payable from one party for the benefit of another (FBO) is a term used in the payee line of a check that is made out to an institution or custodian. The check must be endorsed by the first payee. For example, if the pay-to line reads “Ms. Smith FBO Mr. Smith”, then, Ms Smith would be the first to endorse the back of the check followed by Mr. Smith.