What is a special endorsement?

A special endorsement is a type of endorsement on a check that allows the recipient to transfer the check to someone else. This endorsement is also known as an endorsement in full, and it requires the recipient to sign their name and the name of the person or organization to whom they are transferring the check.

For example, if John receives a check from Jane and endorses it with a special endorsement, he can then transfer the check to his friend, Sarah, by writing "Pay to the order of Sarah" and signing his name and Sarah's name on the back of the check. Once the check is endorsed with a special endorsement, it becomes a negotiable instrument that can be used as payment by any subsequent holder of the check.

Special endorsements are useful in situations where a check needs to be transferred to someone else, such as when a business owner receives a check made out to their business and wants to transfer it to their personal account. However, it's important to note that not all checks can be endorsed with a special endorsement, and some banks may have restrictions on this type of endorsement.