Endorsing a check to someone else might seem difficult, but it's an easy process. If you're new to writing checks, check out our articles on How to Write a Check and How to Endorse a Check.
What is Check Endorsement
Basically, it's just signing the back of the check to authorize the transfer of money from one person or company to another and is an important step to verify the check has reached the person or company intended and that it's processed correctly.
What is a Third-Party Check
When a check is originally written to you, and you endorse the check to someone else, that someone else is the third party, which is why the check is known as a third-party check. These checks are riskier to deposit or cash for the bank because of fraud, so most banks have strict policies on third-party checks. Always check bank policy to make sure you understand what is required before moving forward.
Find the Endorsement Area
On the back of the check, there is one side with space for your signature. Most of the time, there is a line provided, but if there isn't, it will be clear which side you need to sign. There is usually a sentence that says something like "Please sign above, do not write, stamp, or sign below this line" or something similar.
Sign the Back with Your Special Endorsement
A special endorsement is also known as an endorsement in full. This allows you to transfer a check that's been written to you over to a specific person or entity.
Using a dark ink pen, sign your name at the very top of the endorsement area and then write "pay to the order of name," which, in your case, is the name of the person or company you want to give your check to. You'll want to use a dark ink pen specifically because phone cameras and the bank's check scanners have a hard time picking up color inks, and your endorsement is necessary for the person or company you're giving your check to so they can deposit or cash it.
Go to the Bank Together to Deposit
You're almost done! It's recommended that you go to the bank with the person you are endorsing the check to because the bank doesn't know if the check is stolen or fraudulent. Because of that risk, the policy for many banks is that they will not accept third-party checks unless both parties are present, along with any other requirements. Don't worry about the check issuer needing to be present—if the check is written out to you, the check is yours.
Be Cautious Before Depositing a Third-Party Check
If someone wants to sign their check over to you so you can deposit it into your account and give them the cash, that is a big red flag and could be a scam. If you're unsure, do not do this and talk with a trusted friend or family member to get a second opinion. You can also call your bank, and they will be happy to talk you through the situation to figure out if this is likely to be fraudulent. Remember, if you deposit a check into your account and it comes back as fraud or the check bounces (is returned unpaid), you are liable for that money and will owe the bank for the amount of the check.
WaFd Bank is Here to Help
No question is too small for our friendly bankers! With WaFd Bank, you also have access to tools and services to help you manage your finances and get the most from your money. We even offer Free Checking* with no minimum balance or monthly maintenance fees, access to over 40,000 fee-free ATMs, and more! Visit us at your neighborhood branch, give us a call at 800-324-9375, or check out what WaFd online banking has to offer.
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