Whether it’s ordering pickles to your doorstep at 4 a.m. or sending live video footage to someone across the world, our phones have changed the way we do, well, just about everything.
Banking is no exception. These days, taking care of money matters from your phone is easier and more accessible than ever. All you need is a mobile device that can connect to the internet.
In fact, one study estimates that two-thirds of all banking customers use some sort of online banking as their primary method of conducting business, whether via a computer or a mobile banking app.
Most mobile banking apps allow you to transfer money between accounts, pay bills, and check your account balances. More recently, banks have adopted the capability to allow for mobile deposits.
Know how you always had to deposit a check at a physical bank or an ATM? Not any longer. These days, you can snap a couple pics of your check on your phone and voilá! Your check is deposited.
What is a mobile check deposit, how does mobile deposit work, and should you use it? Below, we’ll explore the advantages of mobile banking services as compared to going to your physical branch.
How Does Mobile Banking Work?
Mobile banking is a service provided by a financial institution, like a bank, that allows its customers to conduct transactions, such as checking an account balance, using a mobile device. This is somewhat different than internet banking, which generally refers to banking done on a computer or laptop.
The primary difference between internet banking and mobile banking is that mobile banking uses software designed specifically for a mobile device, called an application or “app.” Customers using a computer would log onto an online portal to access their accounts using their internet browser.
It is possible to use a smartphone’s internet browser to log into the online portal, but a bank’s app generally provides a better and faster user experience, as it was specially designed and built to be used on a smartphone or tablet. “Mobile banking” refers specifically to the use of a bank’s app.
What Is A Mobile Check Deposit?
The latest iterations of mobile banking have made the use of mobile deposit widely available. With mobile deposit, a customer is able to deposit a check into their account using your phone or tablet’s camera.
Most financial institutions require that you take a photo of both the front and the back of the check, and indicate the amount of the check. Before you do this, be sure to endorse the back of the check. Some banks may also request that the depositor write “For Mobile Deposit at [Bank] Only” or something similar.
The app generally lets you use this feature 24 hours a day, although some banks may only make a same-day deposit up until a certain hour, like 10:00 pm. Every bank will be different, but most banks will deposit a check quite late in the evening, even if they won’t all 24 hours. Generally, deposits will show up same-day or next-day, sometimes fully and sometimes partially, depending on the rules of your bank.
Deposit checks from your phone–
For example, say you make a mobile deposit worth $3,000. Your bank makes $500 available immediately, and the remaining $2,500 available in two business days.
Each bank is going to have its own “funds availability” policy, though there are some federal regulations on how long a bank can place a hold on a deposited check. (For example, a bank cannot place a hold on a check valued at less than $200 .) A bank can always have rules that are less strict than the federal rules, and release the funds for use sooner. Again, it is always going to depend on the bank, so be sure to ask.
Some banks may have one-day or monthly dollar limits on mobile deposits (like $10,000 per month). Others may have limits on the size of checks that they are willing to cash over mobile deposit. For example, some banks will not allow customers to mobile deposit checks worth more than $5,000.
How Does Mobile Deposit Work?
How does mobile deposit work? It is quite simple actually. All you need to do is take a picture of your check within your financial institutions app and then the information is transmitted.
When this happens, a bank or financial institution will generally produce a copy of the check as a stand-in for the physical copy. Using this information, a bank will attempt to collect the money from the check’s writer.
Even before the bank is able to retrieve the money from the check’s source, the money is deposited into your account. Though the technology is incredible, the money itself isn’t actually moving that fast.
That produces one of the primary problems with mobile banking—folks might spend money before the money has truly been transferred from the source. If the bank couldn’t obtain the funds for whatever reason and the placeholder funds were redacted, it leaves the banking customer vulnerable to overdraft charges.
After making a mobile check deposit, hold onto the physical copy of your check for two weeks in case there is a problem getting the check deposited. If you need to, mark it so you know that you’ve already deposited the check—there is such a thing as a returned-deposit fee.
After a couple of weeks, when the check has cleared, you should be fine to get rid of the check. As with any document that contains private bank information, do not simply put the check into the trash or recycling—shred or destroy the check so that no one can obtain the information.
The Advantages of Mobile Deposit
Save Yourself a Trip to the ATM
Depositing checks was one of the last few reasons people still had to make trips to the bank. Now, with mobile deposit, the drive to the nearest branch is no longer necessary. This can help you save time because it isn’t necessary to travel all the way to your in person branch.
Deposits Can Be Done Later than at Bank Branches
For lots of working people, getting to the bank before it closes at 5:00 pm on a weekday is difficult to do. With mobile banking, checks can be deposited at any time of day, any day of the week.
Exactly when the cash becomes available to use (and in what amount) will depend on that particular bank’s rules, but many banks have extended hours for mobile deposit. Customers can generally access at least some money, even with deposits made later in the evening or on the weekends.
Deposits Are Credited Quickly
Because of the extended hours offered by mobile deposits, it is possible to deposit a check and see the money available in your account faster than if you had to wait until you make it to a branch location. If you deposit the check during mobile deposit hours, it is possible to see your funds immediately.
Plus, mobile check deposits are generally quicker than ATM deposits because they have to go get the actual checks from the ATMs and manually digitize them. Where as if you deposit your check via mobile app it is already digital.
You Can Deposit a Check from Anywhere
Talk about convenience! Sometimes, you’re simply not anywhere near a branch or appropriate ATM but need to deposit a check. One of mobile banking’s biggest benefits is being able to deposit a check from anywhere in the world.
You can deposit a check from your phone on the go, anywhere in the world. As long as you have access to the app you can deposit your check no matter where you are.
Deposits Are Secure
Worried about security? Depositing your checks through your mobile app is secure because the photos you take of your check are not stored on your phone.
A Few Downsides
Mobile deposits have a lot of benefits, but there are also a few downsides. One for instance is if you want to cash your check you will not be able to do so via mobile deposit. Additionally, you usually cannot deposit multiple checks at once. You would have to deposit them one by one on the app.
Take Advantage of Mobile Cash Management
Most financial institutions offer mobile cash management and deposit, but always be certain to ask if you’re planning to switch banks. Ideally, a bank will offer a generous deposit window and won’t charge for a mobile deposit service. Especially as banks get more competitive for your service, there’s no reason to pay a fee to deposit your checks via your device.
In addition to the rise of mobile banking due to increased access to internet and smartphone devices, so has there been a greater demand for transparency at banks. Before, it was difficult to compare banks. Now, it can be done with a few keystrokes and a good search engine.
A SoFi Money® cash management account allows you to spend and save in one place. Plus with SoFi Money there are no account fees (variable and subject to change).
In other words, you can use your SoFi Money account to pay for the things that you need—delivery pickles at 4 am, per se—and you can use it to build your wealth.
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