To use a check to pay someone else, you can cash the check and then hand over the cash or, by signing the check to the person you want to pay, you could save some time and effort. To sign over a check, you must endorse it with both the recipient’s information and your own signature.
Having available checks from your bank gives you a lot of flexibility when paying on account. You pay for whatever you want in order to get the goods on the same day and write the clearing date that’s suitable for you. It’s that easy.
However, what happens when you want to sign a check to someone other than yourself? Is this even possible?
Even if it is, how would one go about doing it? To answer those questions as well as a couple of other ones related to signing checks over to others, keep reading.
Is It Possible to Sign a Check to Someone Else?
The Federal Reserve mainly regulates the central banking system in the US. Most bank branches share the same major policies, but there are exceptions.
That’s why the requirements for getting a loan in one bank aren’t entirely the same as in the next one. You can get a surprisingly low interest rate on a loan if you know where to look.
The same principle is with writing checks to someone else. In one bank, it’s acceptable, in another – not entirely.
In some banks, you’ll just have to go over a couple more security steps – you’ll need the ID of both parties, sign some papers, etc.
And although it can be tricky or time-consuming, you’ll get the job done.
The bottom line is that it’s entirely possible to sign a check over to someone else. However, it’s best to call your bank, explain your situation, and see what your options are.
Some banks have a strict policy regarding signing a check over to another party, and won’t cash it.
Because it’s not a cashier’s check and the bank doesn’t deposit the amount to their account, the payee will have to agree they guarantee that you actually have money on your account. So how to sign a check over to someone else, and what’s the procedure?
How to Sign Over a Check to Someone Else
When you receive a check and sign it over to someone else, you are creating a third-party check.
Instead of just signing your name on the back of the check as you would when chasing the check yourself, you’ll need to include information about the person to whom you’re signing it over.
Third-party checks are useful because you can’t have someone else cash a check for you (as previously reported). Note that the process is the same regardless of whether you’re signing over a personal check, business check, insurance check, or another type.
Take the following steps (which you can see in action in our video below):
Step 1: Confirm that the person or company you’re signing the check over to will accept a third-party check.
Before signing a check over, it’s best to check with the recipient and confirm that they are willing to accept a third-party check.
It’s also a good idea for the recipient to double-check the requirements for depositing or cashing third-party checks at their intended bank or store.
Not all banks or check cashing locations will accept third-party checks due to the increased risk of fraud, and you may need to accompany them to the check cashing location to verify the check.
Step 2: Add the recipient’s information.
Every check includes an endorsement section on the back marked “Endorse Here.” Rather than signing the check on this line as you would when cashing it, you’ll add the recipient’s information above your signature.
Write “Pay to the order of [recipient’s name]” on the first line of the endorsement section — for example, “Pay to the order of John Smith.” Be sure the name of the person you’re singing the check over to is legible and spelled correctly.
It will need to match their ID when they cash the check.
Including the recipient’s name above your own is an anti-fraud measure; the bank will know that you genuinely signed the check over to that person, and they didn’t find an endorsed check and sign it over to themselves.
Step 3: Endorse the check with your own signature.
Below the recipient’s information, sign the second line of the “Endorse Here” section with your own name.
According to the Uniform Commercial Code, a series of laws pertaining to commercial transactions in the U.S., your signature serves as a warranty. You are telling not just the person you’re giving the check to, but also that bank that cashes it, that the check is valid and unaltered.
Step 4: Give the check to the recipient.
Once the check is properly endorsed with your signature and the recipient’s name, the recipient can cash or deposit it.
It’s best if you go with the recipient when they attempt to deposit or cash the check; as noted above, many places that accept or cash third-party checks require that both parties be present and show photo ID.
Different Policies in Banks
As mentioned before, not all banks have the same policy regarding check endorsement. Although your bank may tell you that you can indeed endorse a check to someone, that doesn’t mean that the recipient’s bank will allow them to cash it.
That is why it’s best to call both your and the recipient’s bank and make sure that they approve endorsing checks. Even better, talk to a bank employee in person and find all the information you need.
Cashing at the ATMs
No matter what the amount that you want your endorsed check to bear, there’s one thing you should never do. That is, of course, to cash it on an ATM machine.
When you send the check to the payee, make sure to give them a call and remind them not to cash it on an ATM. Either that or add a memo to the letter.
The fact is that you can cash a check at an ATM. However, this option is only available for regular checks.
Because everything is automated, and the ATM recognizes only the most common types of a check. And the endorsed check isn’t one of them.
But what can happen if you try to cash an endorsed check on an ATM? You’ll be able to insert the check-in the ATM, select the option to cash it, and that’s about it. The ATM will either display an error, and you’ll have to call the bank to get the check back.
The other scenario is that it won’t clear. This can create additional problems on both ends. You’ll have to contact the bank to explain the situation, sign a bunch of papers, have the third party present, etc. And who would want to waste time on that?
The best thing you can do is avoid cashing endorsed checks on ATM machines.
Again, you can call the bank or talk to the bank’s employee in person and ask about your options when cashing out an endorsed check. In most cases, they’ll tell you that it’s feasible but will advise you to avoid it if possible.
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