4 Downsides of Using Mobile Deposit

Managing your savings and checking accounts can be a lot easier these days thanks to innovations like online and mobile banking. One of the most popular tools that banks feature is mobile deposit, which allows you to add money to your account by taking a picture of it with your smartphone.

Ask a financial advisor about setting up your financial accounts to for savings and investments.

How Does a Mobile Deposit Work?

Mobile check deposit is a way to virtually deposit a check’s funds directly into your bank account via a mobile app. It is a way to avoid the long lines at the bank and instead deposit your check within the comfort of your home.

There are just a few steps to get started:

Download your bank’s app.
Log into your account and look for the option for mobile check deposit.
Capture a clear image of both the front and back of your check before uploading it to the system.
Once the check is accepted, you should receive a confirmation message.

Mobile deposit generally works for both checking accounts and savings accounts, but check with your bank for more details.

1. It Can Take Longer for Funds to Hit Your Account

Generally, when you deposit a check at the drive-thru or teller window, you can expect to see at least some of the money credited to your account that same day. When you deposit a check from your mobile device, it may take a little longer for your funds to become available based on what time of day the deposit was made. For example, mobile check deposits made after 6 p.m. Pacific time on business days typically do not clear until two business days later.

Aside from the processing cutoff times, there are a few other things that can potentially affect how long it takes for the money to show up in your account. There are a few reasons why you may have to wait for a check to clear. It might be because you are a new customer, you have multiple overdraft fees, the deposit amount is too high (usually $50,000 or more) or the bank believes that the check will not be honored. It can take as long as a week for it to be verified before the deposit clears.

2. Some Banks Limit How Much You Can Deposit

Mobile deposit only goes so far when you have multiple checks to deposit each month. Some banks require you to make your deposits at an ATM or in-person at a branch once you reach a certain number of transactions or a specific dollar amount.

Each bank sets its own policy on how much you can deposit from your mobile device. In some cases, it depends on how long you have been a customer. For example, at Citibank, the limit for new account holders is $500 per day or $1,500 per month.

3. You May Be Charged a Fee

While most banks offer mobile deposit services at no charge, others impose a small fee. It is also common for a fee to apply if you want access to your funds early.You may have to pay a fee if you have an account at a smaller community bank or credit union, so it is a good idea to read over your account agreement before you begin using mobile deposit. While it does not seem like a lot, you could easily nickel-and-dime yourself if you use mobile deposit on a regular basis.

4. Security Is Not 100% Guaranteed

Banks are more cautious than ever these days when it comes to protecting their customers’ information, but there is always the possibility that a cyber thief could get their hands on your account details if you use mobile deposit.

To minimize the risk, it is a good idea to avoid storing your username or password in your phone’s app, and only log in to mobile banking services using a secure connection. Something as simple as putting a lock code on your smartphone can protect your bank account if your phone gets lost or stolen.

Bottom Line

If you do not have time to stand in line at the bank, mobile deposit can be an efficient way to manage your money. Just be sure you are clear on your bank’s policies before you start snapping away with your phone.

Tips for Financial Planning

A financial advisor can help you review the terms of your bank account and create a financial strategy moving forward. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you want to build your savings up consistently, consider setting up automatic transfers from your checking to your savings accounts. This approach could help you make saving a routine part of your financial life.
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