One of the benefits of bank check transactions is their ability to transfer them to third parties; that is, the payee of a check can transfer it to another person. This procedure is known as «One endorsed check». Now, in order to make this transfer, it is necessary to comply with certain requirements to endorse a check.
In this article you will find sayings requirements to endorse a check, Besides types of checks that exist and their classification. Likewise, you will have at your disposal recommendations to endorse correctly a check and the importance of knowing how to make a “endorsement» check.
So, if you are interested in endorsing a check, we invite you to continue reading this article prepared to answer the basic questions about this procedure.
How Can You Endorse a Check Correctly?
To endorse a check correctly, two general requirements must be met, which are: verification of which check is of the type «negotiable» and the signature of the beneficiary In the first instance.
In the case of the first requirement it is extremely important verify the type of check that has been issued to you, since negotiable checks are the only ones that can be transferred to third parties.
On the other hand, for an endorsed check to become effective it is it is necessary for the payee to stamp their signature on the back of the check, so that the other person can carry out the transaction at the bank.
In the same way, there is also a short and simple procedure, so you can endorse a check correctly and so that you or the new beneficiary (known as endorsee) can safely cash the check.
This procedure is as follows:
- The original beneficiary must place your signature on the back of the check.
- Then you need to place the name of the new beneficiary.
- Finally, the residential address and phone number of the new person (endorsee).
Endorse a Check: Legal Persons
People who are registered as legal entities, they can also endorse checks for third parties to collect them at bank lockers.
In this case, there are not many changes that stand out, the requirements are the same as those established for natural persons and the procedure is similar. The original payee must sign the back of the check and put the endorsee in writing.
However, it is in this step of the procedure that there is a difference with respect to natural persons. For a check endorsed by a legal entity not to be worthless, it is necessary that these persons put on the back of the check the expression «By proxy» or «Pp», followed by the name of the company, together with the signature and details of the endorsee. In this way, the check begins to contain support for its exchange.
Types of Checks
We have already mentioned that in order to endorse a check, it must be a check of type «negotiable»; but besides this, there are different types of checks and here we will explain them to you.
First, according to the National Commission for the Protection and Defense of Users of Financial Services (Condusef), there are two types of checks:
- Negotiable checks
- Non-negotiable checks.
In the first case, negotiable checks are those that can be endorsed, since the funds are can be deposited into an account or can be cashed to deliver the cash.
Secondly, non-negotiable checks They are that they can only be collected through the bank window by the beneficiary; so they are checks that cannot be endorsed.
In addition to these types of checks, there are other options that depend on the use that you want to give them; so we can find a classification according to the type of beneficiary or the collection method.
Classification According to the Type of Beneficiary
Checks can be classified depending on the type of beneficiary, so we can find the following options:
- Check to bearer: They are the checks that do not have the name of the payee marked; so anyone can collect it.
- Nominal check: They are those checks that have the beneficiary of the same marked; Therefore, they can only be collected by this person or endorsed to others, if the beneficiary wishes.
Classification According to the Collection Method
Another of the classifications of checks is due to their payment method; which allow the following check options:
- Crossed: They are those checks that cannot be cashed in cash, but are cashed through a bank account.
- Conformed: They are those checks that the banking entities make sure that the beneficiary can cash it without inconvenience.
- To pay into a bank account: They are those checks that cannot be cashed in cash, but have in writing «To pay».
- Window: They are not checks per se, but they serve as proof that the beneficiary withdrew money from their account from the window.
- Traveler: They are those checks that are issued in any currency and without expiration date. As its name implies, it is more useful than all for travel.
Why is it Important to Know How to Endorse a Check?
Is it important to know how to endorse a check? The answer is yes. Endorsing a check is quick and easy to begin with, so you don’t need to learn much. In addition, it is a procedure that can help you a lot in the present and future. Here we explain why.
Endorse a check allow someone else to collect it, so you can delegate the responsibility of going to a bank to do the procedure to a third party. This can help you to dedicate yourself to other activities and that other people are responsible for making the withdrawal or deposit of the check.
Likewise, it can also be important to know the advantages of paying or cashing with checks, since they are benefits that can motivate you to use and endorse them at some point.
Advantages of using Checks
The using checks to cash or pay has its advantages And then we will explain them to you so that you can choose if you want for this type of transaction.
- The check’s can be charged at any bank, so you have no limitations when it comes to charging or depositing it.
- They can be issued whenever you want, so you can streamline your business operations.
- There is legal coverage on checks, which allows you to make payment claims for a check.
- Checks can be postscript, that is, you can deliver a check with a later date. This allows the financing of purchases.
- Normally, checks are used by large companiesSo if you have a small business, this will be the way to operate financially.
- Now the checks can be charged electronically, which represents one more facility.
- They are recognized as a secure bank transaction method, since they must carry the data of all those involved and, above all, the signature of the person who uses them.
Recommendations for Endorsing a Check
At the time of Endorsing a check there are several aspects that you must take into account to do it correctly and, also, to maintain security about the process of the same. For that reason, we present you some recommendations for endorsing a check.
- Be sure to spell the name of the new beneficiary correctly on the back of the check, so that it can be cashed or deposited.
- Remember that for an endorsed check to take effect it is You need to stamp your signature.
- If you can add more data about the new beneficiary, better. The DNI can be a good information.
- Remember that In order to endorse a check, it must be from «Negotiable type», but the check cannot be endorsed.
- If you are a legal person, you must place the expression «by proxy» or «pp» and then the name of the company.
What is it?
Checks are a document with which a person can buy or pay, through a bank, with the money they have deposited in their accounts. This procedure allows you to make your purchases without resorting to the physical use of money.
In the case of an endorsed check, this is when the payee of a check decides transfer the ability to collect it to someone else, so that this is the one who collects it or deposits it in a bank.
Likewise, in order to carry out this procedure it is necessary that you be aware of complying with the requirements to endorse a check, which are: that the check is from type «negotiable» and the signature of the original beneficiary.
On the other hand, the procedure you must follow to endorse a check is easy, you just have to do the following:
- Write the name of the new payee on the back of the check.
- Put some extra information about the new beneficiary.
- Sign on the back of the check.
Endorsing a check can be a procedure that helps you on many occasions in your life, either to make it easier for you to do other activities or to process banking operations. In either case, know the requirements to endorse a check it will be necessary.