How to Deposit Cash to an Online Bank

Online banking offers a convenient approach to managing finances, allowing access to accounts and transactions from virtually anywhere. This digital model often provides benefits like competitive interest rates and reduced fees compared to traditional institutions. However, a common inquiry for many users transitioning to online banking involves the process of depositing physical cash, as these banks typically do not operate physical branch locations.

Why Depositing Cash to Online Banks Differs

The fundamental difference between traditional banks and online-only banks lies in their physical infrastructure. Traditional banks maintain a network of branches with tellers and proprietary ATMs, facilitating direct cash deposits. Online banks, by design, operate without these physical locations, which allows them to reduce overhead costs and often pass savings to customers through higher interest rates or lower fees. This necessitates using alternative, indirect methods to convert physical currency into digital funds within an online account.

Step-by-Step Methods for Cash Deposits

Depositing via ATM Networks

Many online banks partner with extensive ATM networks, such as Allpoint and MoneyPass, to enable cash deposits. To use this method, you first locate a deposit-accepting ATM within your bank’s network, often using an ATM locator tool on your bank’s website or mobile app. Once at the ATM, you insert your debit card and follow the on-screen prompts to deposit cash directly into the machine, which typically does not require an envelope. While most online banks do not charge a fee for ATM cash deposits, the ATM owner might impose a small surcharge.

Some ATMs within these networks, specifically Allpoint+ locations, are equipped to accept cash deposits. Daily deposit limits can apply, such as $1,000 for some Allpoint+ ATMs. It is important to confirm that the ATM is part of your bank’s deposit network to ensure the transaction processes correctly.

Using Retailer Services

Several online banks collaborate with third-party services, often powered by the Green Dot Network, allowing cash deposits at participating retail locations. Common stores offering this service include 7-Eleven, CVS, Dollar General, Walgreens, and Walmart. To make a deposit, you present your cash and typically either your debit card or a barcode generated from your bank’s mobile app to the cashier.

The cashier processes the transaction, providing a receipt as proof of deposit. Funds are usually available in your account within 10 to 15 minutes. A service fee, commonly up to $4.95 per transaction, may be charged by the retailer or third-party service for this convenience.

Converting Cash to a Money Order or Check

Another method involves converting your cash into a money order or cashier’s check, which can then be deposited remotely. Money orders can be purchased with cash at various locations, including post offices, grocery stores, and some convenience stores. These instruments typically incur a small fee, often less than $2, for values up to $1,000.

After purchasing the money order, you can endorse it to yourself and deposit it into your online bank account using mobile deposit by taking a photo through your bank’s app. If mobile deposit is not available, you may be able to mail the money order to your bank. This method provides a traceable record for your cash deposit.

Depositing Cash through a Linked External Account

If you maintain an account with a traditional bank that has physical branches, you can deposit cash there and then transfer the funds to your online bank. This involves making a cash deposit at the traditional bank’s branch or ATM. Afterward, you can initiate an electronic transfer, known as an Automated Clearing House (ACH) transfer, from your traditional bank account to your online bank account.

ACH transfers move money between financial institutions through a centralized network. These transfers generally take up to three business days to complete and are typically free of charge, though some banks might impose fees. Setting up this link requires providing your online bank’s routing and account numbers to your traditional bank.

Key Considerations Before Depositing Cash

Before initiating a cash deposit, it is important to understand the specific policies of your online bank. Deposit methods and associated limits can vary significantly between different institutions. Some online banks may not support certain cash deposit options at all.

For instance, while banks generally do not have specific limits on cash deposits, transactions exceeding $10,000 in a single day or within a 24-hour period must be reported by the bank to the IRS. Attempting to break up larger deposits into smaller, frequent transactions to avoid this reporting, a practice known as structuring, is illegal.

Maintaining receipts and records for all cash deposits is a sound practice for security and verification purposes. This documentation can be crucial if any discrepancies arise with your deposit.