Depositing at ATMs

Bank One is not alone in slamming the drawer on shared depositing at ATMs. Many banks shun it for a gamut of reasons. They cite lack of demand from their customers, the fact that ATM deposits are a much more expensive transaction than withdrawals and a lack of desire to help the competition -- usually smaller banks looking to essentially expand their tiny ATM networks.

Wachovia offers shared deposits only in the Northeast, says spokeswoman Mary Beth Novarro.

"And not everywhere in the Northeast. We do it because they've always had the ATM arrangement and we don't want to take away the service. But we don't offer it elsewhere in the country because it's not done in the market. We're not aware of other banks doing it and we don't believe the customers expect it."

Depositing at your bank's ATMs is pretty straightforward. No fees, no hassles -- just find a machine that accepts deposits. It's when you step outside the cozy confines of your bank's ATMs that it can get hazy.

Most banks join one or more of the ATM-payment networks. You can tell which ones your bank has joined by looking for the network logos on the back of your ATM card. Just as these networks help consumers find ATMs to make withdrawals when they're away from home, you can also make deposits -- sometimes.

NYCE, for instance, has a shared deposits program. The NYCE network includes 122,000 ATMs that belong to the 2,200 banks and credit unions in the network, according to Susan Zawodniak, the network's executive director. About a third of the institutions, 835, participate in the shared deposit program. That means 4,500 of the ATMs in the NYCE network accept deposits.

"If your financial institution allows, you can make a deposit within your own state. You may or may not be able to make deposits in other states. The institution that owns the ATM can say whether it accepts deposits from other states," says Zawodniak.

Whether you pay a fee for making a deposit depends on your bank and the ATM owner.

If there is a fee it will likely, but not always, be higher for an ATM that is off the bank's official premises, such as the ones found in malls, supermarkets and airports.

Zawodniak says that not a lot of off premise ATMs accept deposits because it's so much more expensive than having an ATM that simply spits out cash.

"We have servicing rules regarding deposit items. You need to retrieve deposits within 24 hours. If it's off premise that requires an armored car. You have to prove the deposits -- the ATM owner has to open the envelope and compare what's in there to what the cardholder keyed in. Then you have to put those checks into a clearing mechanism so the credits and debits can flow and make the banks whole.

"It's a system of credits and debits and electronic messaging. If you accept deposits at an ATM you must service the machine every day and it ratchets up your cost structure."

It's worth mentioning that NYCE's policy of retrieving deposits within 24 hours is not mandated by federal regulations. Other networks or ATM owners may follow different guidelines.

Despite the costs, Visa's Plus ATM network apparently sees a reason to say yes to shared deposits; it now has the Plus Shared Deposits program.

"We have close to 8,200 ATMs that are registered to take Plus shared deposits," say John Brinnon, vice president of Visa ATM card products.

"This is very popular among middle- to smaller-tier financial institutions. They don't have big ATM networks. This provides more access to machines for all types of transactions. Most consumers are comfortable making deposits at their own bank machines. Some are comfortable at foreign machines and some aren't. But there are people out there looking to make deposits at machines other than their own institution's."

Judging from our e-mail, many people are confused about funds availability when depositing at ATMs. Federal regulations require that funds from local checks be available no later than the second business day after the day on which the funds were deposited -- providing the check was deposited on a banking day and that it was deposited in an ATM owned by your bank. Nonlocal checks can be held for five business days.

The government allows some exceptions when you deposit funds in an ATM that isn't owned by your bank or one that is off the bank's premises.

Here is a summary of federal regulations regarding the availability of funds:

• A depositary bank must post or provide a notice at each ATM location that funds deposited in the ATM may not be available for immediate withdrawal.
  
  
• If a bank makes funds from deposits at nonproprietary ATMs available for withdrawal later than funds from deposits at proprietary ATMs, it must provide a description of how the customer can differentiate between a proprietary and nonproprietary ATM.
  
  
• Deposits at nonproprietary ATMs -- funds must be available for withdrawal not later than the fifth business day following the banking day on which the funds are deposited.
  
  
• Funds deposited at an ATM that is not on or within 50 feet of the premises of the depositary bank are considered deposited on the day the funds are removed from the ATM, if funds normally are not removed from the ATM more than two times each week.
  
  
• A depositary bank that operates an off-premises ATM from which deposits are removed not more than two times each week must disclose at or on the ATM the days on which deposits made at the ATM will be considered received.
  
  
• Funds deposited at a staffed facility, ATM, or contractual branch are considered deposited when they are received at the staffed facility, ATM or contractual branch.

Financial institutions do not always have to release the full amount of the check at once. For a detailed description of the federal regulations regarding this, click here.