What is a Deposit Stamp?

Mary McMahon

A deposit stamp is a stamp used to endorse checks for deposit into a bank account. These stamps are commonly used by businesses for handling their checks, as endorsing checks by hand would be time consuming. Individuals can also use a deposit stamp for preparing checks for deposit. Also known as an endorsement stamp, they can be ordered from financial services companies or any business capable of producing rubber stamps.

Businessman with a briefcase
Businessman with a briefcase

Typically, the deposit stamp lists the name of the business, the bank, and the bank account number. It can also include a line saying “for deposit only,” obliging the bank to deposit the check into the listed account. This prevents situations like unauthorized redirections of checks. Typically, checks are stamped as soon as they are received. When the business prepares a deposit for the bank, the checks are added up, inspected to make sure they were all stamped, and then included in the deposit envelope.

Using a deposit stamp can increase safety. Once a check has been written out to a payee, it is possible for it to be transferred to another party if the payee endorses the back and makes it out to a new person. Someone could fraudulently take a check, endorse the back, and attempt to cash or deposit it. A check with a deposit stamp can only be deposited in the listed bank account. If checks are lost or stolen, the business can rest assured that they cannot be cashed or deposited in different accounts.

Banks may appreciate deposit stamps, as it can be easier to process stamped checks with all the bank account information readily available. Banks often become familiar with the habits of their commercial customers and the deposit stamp may also make it easier for tellers to spot irregularities while processing large volumes of checks, such as a check for an odd amount that seems wrong when compared with other transactions. Likewise, knowing that a business usually uses a deposit stamp, a bank could hold a check made out to that business if it was endorsed oddly, suggestive that someone might be attempting something fraudulent with a check, such as pocketing a check instead of putting it into the register and attempting to cash it later.

When ordering a deposit stamp, people may want to check with their banks to see if there are any special restrictions or wording they should use. It is important to verify the business name and bank account number when sending out the order, and again when the stamp is received, to make sure it is prepared correctly.

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