While more and more financial transactions are taking place digitally, you might still run into occasions when you’ll receive a paper check. This is more likely when two parties are payees on one check, such as an insurance payment. Reviewing how to endorse checks with two payees will help you avoid problems that could delay your cashing or depositing the check.
Read More: Will a Bank Cash a Check If It Is Not Endorsed?
What's a Check Endorsement?
When you receive a paper check, the bank wants to know that the person the check is made out to is the person who is cashing or depositing it. The bank asks you to endorse the check, which means putting your signature on the check, almost always on the back near the end of one of the sides. When you open a bank account, you’re usually asked to sign a signature card so the bank can match the signature on any documents presented in your name (that need to be signed) to your signature.
Without an endorsement, banks or other financial institutions won’t accept the check. This helps prevent fraud. If you change your name or signature, make sure you update your signature card to prevent future problems.
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Endorsing a Check
Endorsing a check is a simple process. In most cases, you will turn the check over and sign above the line on the back of the check provided for a signature.
In some cases, people sign above the line, then below it write, “For deposit only.” This means the bank can only deposit it into the payee’s bank account. This prevents anyone who steals or finds the check from cashing it.
When you endorse a check for deposit, you’ll need to provide your bank account number, either under the endorsement line or on a deposit slip you present with the check. You should sign the check using the same name listed as the payee on the front of the check.
Read More: How to Cash Government Checks
When There Are Co-Payees
In some cases, an insurance company will issue a check with co-payees, explains the law firm of Hanna & Plaut. This can include more than two joint payees, such as a combination of an insured person or business, attorneys, a mortgagee, an adjuster, or a lienholder.
In the case of co-payees, each payee will sign or stamp the check to endorse it. Some businesses use endorsement stamps instead of signatures. This is helpful when a business receives and has to endorse many checks. If there is not enough room above the endorsement line for all of the payees to sign, put as many signatures as possible above the line and then continue below the line.
If a check is written to two people, but says, “or” between the names, such as “Bob Smith or Juanita Morales,” you will only need one signature. If the check payees are “Bob Smith and Juanita Morales,” you will need both signatures, explains the Consumer Financial Protection Bureau. If the payee line simply reads “Bob Smith, Juanita Morales,” you should have both parties endorse the check to be safe.
- You can try endorsing the check with just your signature and depositing the check into your checking account. However, if the check is made out to both you "and" another person or institution as opposed to you "or" another institution, the other payee's signature might be required by the bank you are depositing the funds into.
Steve Milano has written more than 1,000 pieces of personal finance and frugal living articles for dozens of websites, including Motley Fool, Zacks, Bankrate, Quickbooks, SmartyCents, Knew Money, Don't Waste Your Money and Credit Card Ideas, as well as his own websites.