Can You Deposit Cash to an Online Bank?

Online banking offers convenience through digital platforms and often features lower fees compared to traditional financial institutions. As more individuals embrace these digital services, a common inquiry arises regarding the ability to deposit physical cash without a brick-and-mortar branch. This concern highlights a fundamental difference in how online banks operate.

Why Cash Deposits Differ for Online Banks

The primary distinction for cash deposits with online banks stems from their operational model. Unlike traditional banks that maintain extensive branch networks with physical tellers, online banks primarily function in a digital environment. Their infrastructure is designed to facilitate electronic transactions, such as direct deposits from employers, electronic transfers between accounts, and mobile check deposits.

This digital-first approach means online banks lack the direct means to accept physical currency. The absence of a physical location where customers can hand over cash creates an inherent challenge. Therefore, depositing physical cash requires alternative methods.

Methods for Depositing Cash

Retail Partner Networks

Online banks collaborate with various retail chains to facilitate cash deposits. These retail partner networks often include large stores like Walmart, 7-Eleven, CVS, Dollar General, and Walgreens, utilizing services such as the Green Dot Network. To make a deposit, customers typically present their cash to a cashier along with their online bank’s debit card or a unique barcode generated through the bank’s mobile application. The cashier processes the transaction, and a receipt is provided as proof of deposit.

Money Orders or Cashier’s Checks

Another method involves converting physical cash into a money order or cashier’s check. Money orders can be purchased at various locations, including post offices, grocery stores, and some convenience stores, for a small fee, often ranging from $1 to $5. Once obtained, this money order or cashier’s check can then be deposited into the online bank account using the mobile check deposit feature within the bank’s app, which involves taking photos of the front and back of the instrument, or by mailing the item to the bank.

Deposit-Enabled ATMs

Some online banks also integrate with extensive ATM networks that are equipped to accept cash deposits. Networks like Allpoint, Plus, or Cirrus may offer deposit-enabled ATMs. Users can locate participating ATMs through their online bank’s app or website. The process involves inserting the debit card, selecting the deposit option, and feeding the cash into the machine.

Traditional Bank Account Transfer

An indirect but common approach for cash deposits involves using an account at a traditional bank. If an individual holds an account with a brick-and-mortar bank, they can deposit their cash directly into that account at a physical branch or ATM. Once the cash is securely in the traditional bank account, funds can then be electronically transferred to the online bank account through an Automated Clearing House (ACH) transfer.

Important Considerations for Cash Deposits

Fees

When depositing cash into an online bank, various fees may apply depending on the chosen method. Retail partner services, for instance, often charge a fee per transaction, which can be up to $4.95 for services like the Green Dot Network. Money orders also involve a purchase fee, typically between $1 and $5. While some online banks do not charge for ATM deposits within their network, using out-of-network ATMs might incur fees from the ATM owner or the bank.

Deposit Limits

Deposit limits are another important aspect to consider, as they can vary by bank and deposit method. While banks generally do not impose overall monthly cash deposit limits, individual transactions at ATMs may have limits on the number of bills accepted. Retail partners might also have daily or per-transaction limits, such as some locations allowing deposits between $20 and $500, or a daily limit of $1,000 at specific retailers for certain online banks.

Processing Times and Reporting

Processing times for cash deposits into online banks are not always immediate and depend on the method used. Retail partner deposits often appear in the account within minutes to a few hours. However, deposits made via mobile check deposit of a money order or cashier’s check, or through an ACH transfer from another bank, can take 1 to 5 business days for the funds to become available. Federal law requires banks to report cash transactions exceeding $10,000 to the Internal Revenue Service (IRS) by filing a Currency Transaction Report (CTR).

General Advice

It is always advisable to obtain and retain receipts for all cash deposits for verification purposes. Policies and available deposit methods can differ significantly among online banks. Account holders should consult their specific online bank’s website or customer service for detailed information on accepted methods, associated fees, and processing times.