What does a restrictive endorsement on a check indicate?

A restrictive endorsement on a check uniquely specifies how the check can be handled, primarily indicating that it is designated for deposit only. This means that the recipient cannot cash the check in person at a bank; instead, it must be deposited into a bank account. This type of endorsement typically involves writing "for deposit only" along with the account number beneath the signature of the endorser. This safeguard is often used to prevent unauthorized individuals from cashing or using the check if it is lost or stolen.

In contrast, other options do not accurately reflect the implications of a restrictive endorsement. For instance, checks endorsed in a way that allows them to be cashed by anyone lack such specific limitations. The authorization for additional signatories is not associated with restrictive endorsements, as this is typically related to the specific powers of individuals concerning the handling of funds, rather than the limitations set by the endorsement itself. Lastly, while a check may indicate payment requirements, a restrictive endorsement does not convey any conditions regarding the payment amount. Thus, understanding these distinctions highlights the importance of the restrictive endorsement’s role in financial transactions.