How to Endorse a Business Check (2024)

hecks allow people to exchange money without using cash. One benefit of using checks over cash is that they provide a record of the transaction. When someone writes a check payable to you, you have to endorse it to deposit it into your account or cash it. Your endorsem*nt is another element of the transaction record.

Read on for more information about the most secure ways to endorse checks and how to endorse a business check.

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What does it mean to endorse a check?

When you endorse a check, you’re authorizing the bank to release the funds to you and verifying that you’re the intended recipient. You do this by signing the back of the check. Most banks require that you endorse a check as a fraud prevention measure. It allows the bank to verify your identity, often by comparing the signature on the check to the signature on your photo ID.

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How to endorse a check

In most cases, endorsing a check is fairly simple. However, there are a few things you should be aware of so you don’t accidentally make a mistake that could delay processing your check.

Verify the information on the front of the check

Before you sign, check that the information on the front of the check is accurate. Look at the amount—both where it’s written numerically and spelled out—the date, and the spelling of your name. If your name is misspelled on the check, go ahead and sign the misspelled version of your name and then sign the correct version underneath.

See who needs to endorse the check

If the check is only made out to you, you’re the only one who has to endorse it. For checks made out to more than one person, everyone listed on the “Pay to the order of” line must endorse the check. Sometimes, particularly if the check is made out to a married couple, the payee line will list one person or the other, such as “Jane or John Doe.” If this is the case, either person can endorse the check.

Endorse the check

Flip the check over and you’ll see an area at the top that says “Endorse here.” Below that will be a larger area that says, “Do not write, stamp, or sign below this line.” The endorsem*nt area will usually have three lines—more than enough room for you to sign, although it may get crowded if you’re doing a complicated endorsem*nt.

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Types of endorsem*nts

In most cases, you just need to sign your name in the endorsem*nt area. However, you may want or need to include some additional information in some situations.

Blank endorsem*nt

A blank endorsem*nt is the simplest type. You just sign your name on the back of the check as it’s written on the front. Although this is the easiest endorsem*nt method, it’s also the least secure. If you’re going to use a blank endorsem*nt, wait until immediately before you’re ready to deposit or cash the check, either at the bank or through mobile deposit.

Restrictive endorsem*nt

A restrictive endorsem*nt tells the bank exactly what you want to be done with the money, usually by indicating what account you want it deposited into. It also eliminates the possibility of someone fraudulently cashing your check.

To perform a restricted endorsem*nt, you’ll use all three lines in the endorsem*nt area. Write “For deposit only” on one line, followed by your account number on the next. Then sign your name on the last line. If you’re going to be carrying a check around for a while before you can deposit it, it’s a good idea to use a restrictive endorsem*nt.

Mobile deposit endorsem*nt

You can deposit your check directly into your account through your banking app. Instructions may vary depending on your bank, but most will require that you sign the back of the check and indicate that it’s for a mobile deposit. The check may have a box on the back that you can check for mobile deposits, or your bank may require that you write “For mobile deposit” in the endorsem*nt area.

Third-party endorsem*nt

If you want to give the check to someone else, you may be able to do a third-party endorsem*nt. Some banks will allow this, while others won’t, so check with your banking institution before you attempt it. Some banks will permit it only if you go to the bank with the person you’re signing the check over to.

To perform a third-party endorsem*nt, write “Pay to the order of” followed by the person’s name in the endorsem*nt area. They will then need to sign their name below yours before they can cash or deposit the check.

For the benefit of (FBO) endorsem*nt

Some checks are written to one person—or business—but the money is intended to be used to benefit someone else. This may be done if someone is writing a check to a minor child or to a facility that’s caring for the intended recipient. The check will be made out to the responsible person or business followed by “FBO of John Doe.” The entity the check is made out to will cash or deposit the check, but the money will be used for the person listed.

Some banks require both parties to endorse the check. If only one signature is required, it will be the person or business the check is made out to.

How to endorse a business check

If a check is made out to your business instead of you personally, the endorsem*nt process will be a little more involved. Endorsing a business check can only be done by an authorized representative of the business. For a check made out to a business and a person, the process is similar.

On the back of the check, write your business name as it’s written on the payee line. Below that, sign your name and print your company title. You can also include any restrictive endorsem*nts, such as “For deposit to account #.”

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Do I always have to endorse a business check?

Most banks require you to endorse a business check. However, if the check is small and being deposited into an account that matches the payee’s name, you may be able to deposit it without endorsing it. In most other situations, you’ll have to endorse the check.

Check with your bank for their policy regarding endorsem*nts. Even if your bank doesn’t require you to endorse a regular check, some types of checks, such as a cashier’s check, will still need to be endorsed.

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Summary

In this era of multi-factor authentication and sophisticated blockchain technology, endorsing a check is still an excellent method of protecting your money and preventing fraud. For the highest level of security, you should only endorse a check when you’re ready to deposit or cash it. Specifying where a check should be deposited when you endorse it can also make it more secure.

For a secure platform that handles all of your business banking needs, look into Novo’s business banking solution. Running a business is complicated. Banking doesn’t have to be. Novo puts all of your business’s financial information in the palm of your hand for ease of use and greater clarity. Sign up today to get started.

Novo is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A.: Member FDIC.

Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsem*nt of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.

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