DEFINITION of 'Signature Guarantee'

A form of authentication issued by a bank or other financial institution that verifies the legitimacy of a signature and the signatory's overall request. This type of guarantee is often used in situations where financial instruments are being transferred. In most cases, the guarantor accepts all consequences in the event that the signature is fraudulent.

BREAKING DOWN 'Signature Guarantee'

With the number of crimes related to identity theft rising each year, using a signature guarantee service is a great way to prevent others from capitalizing on your identity in order to commit fraudulent acts.

In order to provide some sort of signature guarantee, a financial institution must be a member of a recognized securities guarantee program, such as Medallion.

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RELATED FAQS
  1. How does a company obtain a bank guarantee?

    Find out how bank guarantees work, why they are issued and the process that a business normally goes through to acquire one ... Read Answer >>
  2. What is the difference between a bank guarantee and a bond?

    Understand what a bank guarantee is and what a bond is, and which one is a debt instrument. Learn the differences between ... Read Answer >>
  3. How is a bank guarantee different from a traditional loan?

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  4. Can personal loans be transferred to another person?

    Learn whether it is possible to transfer a personal loan to another person, and find out what happens when you default on ... Read Answer >>
  5. What's the difference between a bank guarantee and a letter of credit?

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  6. Are U.S. banks authorized to issue bank guarantees or medium term notes (MTNs)?

    Bank guarantees and medium term notes (MTNs) are different types of instruments that serve different purposes for corporations. ... Read Answer >>
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