3 Ways to Deposit Checks Without Ever Stepping Foot into a Branch

In October 4, 2017

Header image: remote business banking

Thanks to progressive technology and security that’s tighter than ever before, banking from any location has never been easier. It’s simple to check a balance, transfer money, pay bills, or perform other common tasks from the comfort of your desk or using a phone. Everyone knows about it.

What every everyone DOESN’T know, however, is that you can deposit checks remotely, too. If you’re starting a business that expects to process dozens, even hundreds of checks each month, it’s a fantastic way to save time.

Driving to the nearest branch can be a choice, rather than a necessity.

These are the three most common remote deposit services banks offer:

  1. Remote deposit via a smartphone app
  2. Remote deposit via a scanner
  3. Online deposit followed by mailing a check

It’s important to note that remote deposit is typically a service limited exclusively to business checking accounts, but online deposit may be available for personal checking. Let’s dive into their differences and how they work.

What is remote check deposit?

Remote deposit allows someone to deposit checks to an account without handing over the physical check to the bank. They simply snap a photograph or scan the front and back of a check, then  transmit it electronically.

The transaction is instantly received at the bank for validation and processing, often triggered automatically by the software upon receipt of the images. Because of legislation and the Check 21 Act (aka Check Clearing for the 21st Century Act), the image of the check is accepted as a legal document.

Does it clear the same day?

Money from a check deposited remotely can often be processed faster than a paper check, and customers can easily track scanned checks and deposit history online. Whether the money is deposited the same day or must clear the other party’s bank first may depend on the type of checking account, and is subject to that specific bank’s policies and procedures. Be sure to ask questions so you understand how remote deposit works for your checking account.

It’s also important to understand any fees, deposit limits, security features or requirements, and other details before participating in remote deposit.

Can I use a third-party app?

Most banks require remote deposit to be accomplished using a specific app or software system they provide, which is linked to their systems for fast, smooth processing. Using a third-party solution found in an app store, for example, can cause significant time delays or issues with the deposit, and should be discussed with your banker prior to use.

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If scanning checks rather than using an app, many banks will provide or lease a specific type of scanner to their customers. A consumer scanner or combination copy machine and scanner may not be suitable.

What is online deposit?

Online deposit allows a customer to record the check to their account using an app or software for rapid posting to their account, then mail the check to the bank. It doesn’t typically involve an image of the check, instead relying on creditworthiness of the customer to “loan” the funds to the account until the check clears, similar to the implied promise of a check that’s “in the mail.”

This is different than remote deposit, which grants images of a check the same legal consequences that a paper check physically deposited in the bank would have.

Which one is better for my business?

The smartphone option for remote deposit is most suitable for businesses with a small volume of checks to deposit, but those with a larger volume benefit from a scanner that can handle them in bulk.

While online deposits are available to most customers who meet certain levels of creditworthiness to cover the check if it doesn’t clear or the physical version doesn’t arrive at the bank, not everyone is approved for remote deposit. Most banks have an extremely rigorous screening process to prevent fraud and nonpayment issues with remote deposit.

What do I do with the checks?

Once check images are transmitted for a remote deposit transaction, it’s then up to the customer to store or destroy the physical check once bank processing is complete, depending on their bank’s requirements. It’s wise to keep them for at least five business days, so there’s a tangible check at hand if problems occur with the transaction.

Online deposit is different, in that it requires all checks to be delivered to the bank, since fund aren’t officially “in the account” until the checks have cleared.

Speak to your banker before making a decision

To thoroughly understand both methods of check deposits and determine which is best for your business, it’s important to speak to a banker.  Customer’s may be able to apply for either service online in conjunction with an existing checking account, but a conversation will avoid misunderstandings around how the services work at a specific bank.

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