Which type of endorsement limits the further transfer of a check?

• A. Conditional Endorsement
• B. Special Endorsement
• C. Restrictive Endorsement
• D. Blank Endorsement

Answer: (C)

A restrictive endorsement is specifically designed to limit the further transfer of a check. When a check is endorsed in this manner, it typically includes the phrase "For Deposit Only" followed by the account holder's signature. This type of endorsement ensures that the funds can only be deposited into the designated account and cannot be cashed or transferred to another party. As a result, it adds a layer of security and control over the deposited funds, making it an essential practice in handling checks to prevent unauthorized use.

In contrast, a conditional endorsement allows the transfer of a check under certain conditions, a special endorsement directs the check to a specific person or entity, and a blank endorsement simply includes the signature of the payee without any additional instructions, making it easier for anyone to cash the check.