How to Properly Forward a Check

Quick answer

• Forwarding a check means endorsing it and directing it to a different payee than the one originally written.
• This is often done when a check needs to be transferred to someone else, like a business or a different individual.
• Always endorse the check on the back with “Pay to the order of” followed by the new payee’s name and your signature.
• Verify the new payee’s name is spelled correctly and matches their official records.
• Be aware of potential bank policies or legal implications for certain types of checks.
• For business accounts, ensure you have proper authorization to forward checks.

Who this is for

• Individuals who have received a check made out to them but need to transfer the funds to another person or entity.
• Businesses that receive checks intended for a different department or subsidiary.
• Anyone who needs to reroute a check payment to the correct recipient.

What to check first (before you act)

Goal and timeline

What is the ultimate purpose of forwarding this check? Are you trying to pay a bill, settle a debt, or simply pass funds to another party? Understanding your objective will guide the process. Consider how quickly the funds need to reach the new payee. This might influence whether you hand-deliver the check or mail it.

Current cash flow

While forwarding a check is about transferring funds, it’s good practice to have a general understanding of your own financial situation. Ensure you have sufficient funds in your account if the check is to be deposited by you before forwarding, or if you are acting as an intermediary. This isn’t directly about the forwarding process itself but is a fundamental personal finance consideration.

Emergency fund or safety buffer

This is less directly related to the act of forwarding a check, but it’s a crucial aspect of personal financial health. Ensure you have an adequate emergency fund in place before engaging in transactions that could potentially tie up funds or require additional steps. A stable financial base makes managing these kinds of transfers less stressful.

Debt and interest rates

If you are forwarding a check to pay a debt, confirm the exact amount due, including any accrued interest. Incorrectly forwarding a payment could lead to late fees or continued interest charges. Always ensure the amount being forwarded accurately reflects the obligation.

Credit impact

Forwarding a check incorrectly could inadvertently lead to a bounced check if the original payee attempts to deposit it, or if the new payee deposits it and there are insufficient funds. This can negatively impact your credit score and incur bank fees. Understanding the process minimizes this risk.

Step-by-step (simple workflow)

1. Receive the check: You are the payee listed on the check, but it needs to go to someone else.

• What “good” looks like: You have the physical check in hand, with the correct payee name and amount.
• Common mistake: Accepting a check made out to someone else and trying to forward it without it being properly endorsed to you first. This can lead to issues with the bank.
• How to avoid it: If a check is not made out to you, ask the sender to reissue it in your name or the correct payee’s name.

2. Identify the new payee: Determine the exact legal name of the person or entity to whom the check should be rerouted.

• What “good” looks like: You have the precise, correctly spelled name of the intended recipient. For businesses, this might be the full legal business name.
• Common mistake: Using a nickname or an incorrect spelling for the new payee.
• How to avoid it: Ask the new payee for their exact legal name or business name. If it’s a business, ask for their “doing business as” (DBA) name if applicable, but the legal name is usually preferred.

3. Endorse the check: On the back of the check, in the endorsement area, write “Pay to the order of” followed by the new payee’s name.

• What “good” looks like: The endorsement clearly states “Pay to the order of [New Payee Name]”.
• Common mistake: Simply signing your name without the “Pay to the order of” instruction. This is a special endorsement and is crucial for transferring ownership.
• How to avoid it: Always include the full phrase “Pay to the order of” before the new payee’s name.

4. Sign the check: After writing “Pay to the order of [New Payee Name],” sign your name directly below it.

• What “good” looks like: Your signature appears below the “Pay to the order of” endorsement, matching your usual signature.
• Common mistake: Forgetting to sign, or signing in the wrong place.
• How to avoid it: Ensure your signature is clearly placed in the endorsement area, below the written payee name.

5. Add account information (if applicable): If you are forwarding the check to a business, they may request you add your account number with them below your signature.

• What “good” looks like: Your account number with the new payee is clearly written.
• Common mistake: Not including an account number when it’s required by the new payee.
• How to avoid it: Ask the new payee if an account number or reference number is needed for proper crediting of the payment.

6. Deliver the check to the new payee: The new payee will then deposit or cash the check.

• What “good” looks like: The check is safely in the hands of the intended recipient.
• Common mistake: Mailing the check to the wrong address or losing it in transit.
• How to avoid it: Double-check the mailing address. Consider using a tracked shipping method for valuable checks.

7. New payee deposits/cashes the check: The new payee presents the check to their bank.

• What “good” looks like: The bank accepts the check for deposit or cashing.
• Common mistake: The bank rejects the check due to an improper endorsement or a stale-dated check.
• How to avoid it: Ensure all previous steps were followed correctly. If the check is old, the new payee may need to contact the original issuer for a replacement.

8. Funds are credited: The funds are transferred to the new payee’s account.

• What “good” looks like: The new payee confirms receipt of funds.
• Common mistake: The original issuer of the check has insufficient funds, causing it to bounce.
• How to avoid it: This is outside your direct control once forwarded, but the new payee should monitor their account and inform you if issues arise.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Not using “Pay to the order of”	The check might not be considered properly endorsed for transfer, potentially causing bank refusal.	Always write “Pay to the order of” followed by the new payee’s name before your signature.
Incorrect new payee name	The bank may reject the check, or the funds may be credited to the wrong account.	Verify the exact legal name of the new payee. Ask for it if unsure.
Forgetting to sign the endorsement	The check is incomplete and cannot be cashed or deposited by the new payee.	Always sign your name below the “Pay to the order of” endorsement.
Endorsing a check made out to someone else	You are essentially guaranteeing the check, and could be liable if it bounces.	Never endorse a check not made out to you. Ask the original sender to reissue it.
Forwarding a post-dated check	The new payee may not be able to deposit it until the date on the check, causing delays.	Advise the new payee of the post-date. If urgent, contact the original issuer to have the date corrected.
Forwarding a stale-dated check	Banks may refuse to honor checks that are too old (typically over 6 months).	Contact the original issuer to request a new check.
Endorsing a check with “For Deposit Only”	This type of endorsement is typically restricted to the named payee and cannot be further forwarded.	If you intend to forward the check, use the “Pay to the order of” endorsement. “For Deposit Only” is for depositing into your own account.
Not verifying the new payee’s identity	Could lead to forwarding funds to an unintended recipient, especially if dealing with unknown individuals.	For significant amounts or with unfamiliar parties, take reasonable steps to verify the identity of the new payee.
Forwarding a check with missing info	If the check is missing the original payee’s signature (if required by the bank) or other details, it can cause issues.	Ensure the check is complete as received from the issuer before attempting to forward it.
Forwarding a check that’s already endorsed	If the check has already been endorsed by the original payee, it cannot be further endorsed to a new payee.	If a check is already endorsed, it likely belongs to the endorser. The original issuer may need to reissue it if it’s meant for someone else.

Decision rules (simple if/then)

• If the check is made out to you and you need to pay a specific person or business, then use the “Pay to the order of” endorsement because this legally transfers your right to the funds.
• If you receive a check made out to someone else, then do not endorse it; ask the sender to reissue it to the correct payee because endorsing a check not made out to you can create liability.
• If you are unsure of the exact legal name of the new payee, then ask them for it in writing before endorsing the check because an incorrect name can lead to banking issues.
• If the check is for a large sum, then consider delivering it in person or using a traceable mailing method because this reduces the risk of loss or theft.
• If the check is post-dated, then inform the new payee about the date because they may not be able to deposit it until that date.
• If the check is stale-dated (older than typically 6 months), then contact the original issuer for a replacement check because banks may refuse to honor old checks.
• If you are forwarding a check to a business and they require an account number, then include it below your signature because this ensures proper crediting of your payment.
• If the check is a government check (like a tax refund), then check specific rules about forwarding, as some may have restrictions because these can be treated differently by banks.
• If you are acting on behalf of a business and forwarding a check, then ensure you have the proper authorization from the business because this is a matter of corporate finance.
• If the original issuer of the check has insufficient funds, then the check may bounce, regardless of proper forwarding, so the new payee should be prepared for this possibility.
• If you are forwarding a check for a debt payment, then confirm the exact amount due, including any late fees or interest, because you want to ensure the full obligation is met.

FAQ

What is a “special endorsement” when forwarding a check?

A special endorsement is when you write “Pay to the order of” followed by the name of the new payee and then sign your name. This is the standard method for transferring a check to another party.

Can I forward a check made out to my spouse?

Generally, yes, if the check is made out to your spouse, they can endorse it to you or someone else using the “Pay to the order of” method. However, if the check is made out to you, you cannot simply endorse it to your spouse without using the proper transfer process.

What if the new payee’s bank rejects the check?

This usually happens due to an improper endorsement (e.g., missing “Pay to the order of” or incorrect name) or if the check is stale-dated. The new payee should contact you to correct the endorsement or ask the original issuer for a new check.

Can I forward a check to a third party if I’m a business?

Yes, businesses can forward checks to other businesses or individuals. However, it’s crucial to follow proper internal procedures and ensure the endorsement is accurate, especially if the check is for a significant amount.

What happens if I endorse a check incorrectly?

An incorrect endorsement can lead to the check being rejected by the bank, delaying funds for the new payee. In some cases, it could even lead to the funds being misdirected or you being held liable if the check bounces.

Is it safe to forward a check?

Forwarding a check is a standard financial practice when done correctly. The primary risks involve potential delays if the endorsement is flawed, or if the check is lost in transit. Using traceable methods for valuable checks can mitigate risks.

What if the original issuer of the check stops payment?

If the original issuer stops payment on a check after you have already endorsed and forwarded it, the new payee may not be able to cash it. The new payee would then need to seek recourse from the original issuer.

What this page does NOT cover (and where to go next)

• Specific bank policies on check endorsements and holds.
• Next: Contact your bank or the new payee’s bank for their specific procedures.
• Legal ramifications of check fraud or forgery.
• Next: Consult with a legal professional if you suspect fraudulent activity.
• International check forwarding or currency exchange.
• Next: Research international banking services or consult a financial advisor experienced in global transactions.
• Complex business transactions involving multiple endorsements or trust accounts.
• Next: Seek advice from a business attorney or a certified public accountant.
• How to deal with a bounced check after forwarding.
• Next: Consult with your bank or a consumer protection agency for guidance on bounced checks.