What type of deposit is illustrated below?
Understanding Special Endorsement in Deposits
When it comes to depositing checks, there are different types of endorsements that can be used. One common type is the special endorsement, which is often used when you want to restrict the check to a specific person or entity. Let's explore what a special endorsement is and how it differs from other types of endorsements.
What is a Special Endorsement?
A special endorsement is when the payee of a check signs their name on the back of the check and includes a phrase such as "Pay to the order of" followed by the name of another person or entity. This restricts the check so that only the specified person can deposit or cash it.
Example of a Special Endorsement
Pay to the order of
K.C. Thurman
Jilly Flower
134 263 894
Key Points about Special Endorsement
- Restriction: Special endorsement restricts the check to be deposited or cashed only by the person or entity specified.
- Security: It provides an extra layer of security in case the check gets lost or stolen.
- Validity: Banks will typically only accept checks with proper endorsements, so it's important to understand the different types.