Restrictive Endorsement Law and Legal Definition

A restrictive endorsement is an endorsement signed on the back of a check, note or bill of exchange which restricts to whom the paper may be transferred. In addition to holder's signature, it includes a restriction on how the paper may be used by transferee. Only the payee can write a restrictive endorsement.

The most common wording is "For Deposit Only." The transferee bank must apply the check to the holder's deposit account. Payees use this endorsement when mailing a check for deposit or if someone else deposits their checks.