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For Deposit Only
Answer by John Burnett, BOL Gurus
Guru Bios
Question: Is "For deposit only" and an account holders account number a proper endorsement?
Answer by John Burnett: No. An indorsement (to use the spelling found in the UCC) is "a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (i) negotiating the instrument, (ii) restricting payment of the instrument, or (iii) incurring indorser's liability on the instrument ...." [UCC 3-204(a)] A signature can be a lot of things, but it's not included in what you've described. That said, however, a bank does not need to obtain an indorsement (see UCC 4-205) in order to accept a check for deposit.
First published on BankersOnline.com 8/28/06
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