7 facts everyone should know about mobile check deposit

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Like most Americans, you likely live your life on the go. With a jam-packed schedule of activities and responsibilities to fill your day, the last thing you want to add to your to-do list is a trip to the bank. Although you want to deposit or cash your checks as quickly as possible, finding time to make it to the bank can be difficult — and inconvenient.

That’s where mobile check deposits come in handy.

“Banks don’t have to be open or you don’t have to break in,” says Andrew Roderick, CEO of Credit Repair Companies. “There’s no rush to reach the bank before closing or go on your lunch. Mobile deposits allow you to deposit any time on any day.”

Let’s take a closer look at the ins and outs of mobile check deposits.

What is mobile check deposit and is it safe?

Mobile check deposit allows you to save time by depositing your checks remotely, no matter where you are or what time of day it is. Instead of making a run to the bank, you can simply snap a picture of the front and back of the check on your smartphone and deposit it using the bank’s mobile app. This can help you save time while checking an item off of your to-do list.

In the banking industry, you may hear this digital transaction referred to as “remote deposit capture.” Not only is this a convenient process, but it’s also safe. Still, you should always ensure that the banking app you are downloading to complete a mobile check deposit is from a reputable source. Otherwise you open yourself up to potential fraud. Typically, you’ll find directions to your bank’s app directly on their website.

Things to be aware of

If you are intrigued by the idea of mobile check deposits, then take a closer look at the limitations of this technology below.

1. Your bank can cap how much you can deposit

Banks will typically place a limit on the dollar amount your mobile deposits. Depending on the bank, these can be either daily or monthly limits. The cap, or maximum amount, that you’re allowed to deposit for a given time period will depend on your bank. That number may range from a few thousand dollars to well over $100,000.

Urjit Patel, executive vice president of consumer banking at Axiom Bank, explains the logic behind these deposit limits:  “Mobile check deposit limits are set to reduce the risk of fraudulent checks being deposited. If you have to deposit checks in excess of predetermined bank limits, you have the option to visit a branch or ATM to facilitate the transaction.”

2. Your bank can return a deposit even after you receive a confirmation

Just because you deposit a check via your smartphone, doesn’t mean the check won’t bounce.

“A bank can return a check you’ve deposited through a mobile app the same way it could if you deposit it in a branch,” says Ben Premo, founder of True Fees. “It happens most often when the person issuing the check does not have enough money in their account.”

With that said, it’s important to note that this will affect your mobile deposits. When you deposit a check, you may receive a confirmation. But the bank has the right to return the deposit even after the confirmation is received.

3. Your bank can place a hold on mobile-deposited funds

Just like a regular check, your bank can place a hold on the funds that you deposit via your smartphone. A common reason for a so-called “delayed availability of funds” is simply depositing your check too late in the day. If you miss the cutoff time for check deposits, then you might have to wait an extra business day for the check to clear and have access to your funds.

4. The check images are not stored on your phone

When you’re ready to deposit a check on your phone, it can feel odd. After all, you might wonder who is going to have access to this sensitive information? Importantly, check images are not stored on your phone. Instead, bank apps typically “store the deposit data, including images, on a secured web-based server, thereby protecting the customer and the integrity of their financial information,” Patel says.

5. Your phone helps to snap the right picture

It can be tricky to get the hang of snapping the right picture for a mobile deposit. Luckily, banking apps are there to help you. The app will take the picture once you position the check correctly.

Bill Samuel, owner of Blue Ladder Development and a frequent depositor of mobile checks, says, “I think the most valuable feature offered is the automatic snapshot feature that takes the photo automatically when you have the photo box closely outlined around the check.”

To improve the quality of the photo, it’s best to have a darker background behind your check. Once you line up the check with your camera, it should be quick to snap a picture of the front and back of your endorsed check.

6. You still have to endorse the check

Before you start snapping pictures, make sure to endorse the check. That means that you’ll need to sign the back of the check. With mobile deposits, you should also check the “mobile deposit” box. Or simply write  “for mobile deposit only” below your signature. This will help your deposit process flow more smoothly and make sure the deposit is properly credited to your account.

7. You should hold on to the paper check

Although the quick snap of the check shouldn’t take more than a minute, you should probably hold on to the physical check for a few days to make sure the funds are properly deposited into your account. Wells Fargo recommends storing a hard copy of your check for five days. It can be tempting to toss the check directly into the shredder, but that could lead to problems if the bank has a question about the deposit.

Micheal Foguth, founder of Foguth Financial Group, recommends that you “hang on to the check until you see it clear and move from pending to approved on your online statement.” Indeed, most banks want you to hold on to the check for at least a few days in case the deposit runs into an issue.

Bottom line

Overall, taking advantage of the mobile check deposit feature at your bank can be a big time saver. Although it may take some getting used to, the time you save will be well worth the short learning curve.

If you have any questions about your particular situation as it relates to mobile deposits, contact a bank representative. They will be able to tell you what mobile check deposit limitations, if any, are associated with your account.

Featured image by Andrey_Popov of Shutterstock.

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Written by
Sarah Sharkey
Contributing writer
Sarah Sharkey is a contributing writer for Bankrate. Sarah writes about a range of subjects, including banking, savings tips, homebuying, homeownership and personal finance.