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3 ways mobile deposits can burn you

Man depositing a check on his phone
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Depositing checks by mobile device is usually pretty great, as using your smartphone camera saves you a trip to the bank. But it’s not perfect, and some users inevitably get burned.

“Remote deposit capture,” as it’s known in the banking industry, has become one of the most convenient features of mobile banking for managing your checking accounts. Nearly 6,000 institutions offered mobile check deposit to their retail customers, with nearly 80 million using the service, according a 2017 research report by Celent.

While it has been a game-changer for the way people deposit their money, there are few things you should know before using it.

1. Pokey payment posting

You’d think transmitting a picture of your check directly to your bank’s computers would make the deposit almost instantaneously available in your checking account.

There’s a good chance you’re wrong. Some banks offer same-day deposits, but not all. Many banks also have a set cutoff time for deposits to be available immediately.

If you’re making a remote deposit and expecting it to go into your account on the same day, you may want to check your bank’s terms to make sure it will clear.

2. Deposit limits

Most banks apply a hard limit to how much you can deposit into your checking account through the mobile app because they want to make sure that if they do get hit with some kind of digital fraud, it won’t hurt them too badly.

A 2014 study by the Pew Charitable Trusts found that the limit ranged from  $2,500 to $750,000, and about half the banks that offer the service didn’t disclose any limit at all

3. Keep a paper trail

After you deposit a check with your mobile app, you might be left with a uneasy feeling. What do you do with the physical check you’ve just endorsed?

It might be tempting to destroy them, but the Pew study found that 76 percent of banks want customers to hold on to checks for some period of time after depositing them. Store them somewhere secure, because should your money disappear into the ether, it can be really hard to get the issue resolved without a paper trail.

Convenience vs. risk

High-tech banking works great—until it doesn’t. While technologies like ATM deposits, person-to-person payments and debit cards are great time-savers and work well the vast majority of the time, it is important to know the rules so you don’t get burned.