Which bank is considered the first to process a check deposited by the payee?

The Bank of First Deposit is the correct choice because it refers to the financial institution where the payee (the person to whom a check is written) initially deposits the check. This bank plays a key role in the check processing system by accepting the check for deposit, and it is responsible for verifying the legitimacy of the check and gathering the necessary funds from the payer’s bank.

This term is significant in the context of the banking and payments system as it marks the starting point in the check clearing process. Upon receiving the check, the Bank of First Deposit processes it by preparing it for further clearing steps, which often involve electronic means today, but traditionally may have included physical movement of paper checks.

Understanding the role of the Bank of First Deposit helps clarify how funds are transferred and cleared in the banking system. Other options may pertain to different stages or roles in the check processing cycle, but none match the specific function of the Bank of First Deposit.