What Is a Verification of Deposit and When Do You Need One?

What Is a Verification of Deposit and When Do You Need One?

A Verification of Deposit (VOD) is an official document provided by a financial institution, such as a bank or credit union, that confirms the existence and balance of a financial account. Its primary purpose is to offer an independent verification of available funds, assuring third parties about the financial resources held by an account holder.

Key Information on a Verification of Deposit

A Verification of Deposit form contains specific details about an account. This document includes the account holder’s full name and address, along with the type of account, such as checking, savings, money market, or certificate of deposit. While the complete account number may be present on the form, it is often masked or only the last four digits are displayed for security purposes.

The document specifies the current balance of the account as of a particular date, providing a snapshot of available funds. It also commonly shows the average balance over a specified period, frequently covering the last two or three months, but sometimes extending to six or twelve months depending on the request. The VOD indicates the date the account was opened, demonstrating the longevity of the financial relationship. The name and contact information of the financial institution providing the verification are always included, ensuring the document’s authenticity. Finally, the form usually incorporates an authorization for the release of information, which is signed by the account holder.

When a Verification of Deposit is Needed

A Verification of Deposit is needed in various financial and transactional circumstances to assess an individual’s financial capacity. For instance, mortgage lenders frequently require a VOD to confirm that applicants possess sufficient funds for down payments, closing costs, and required financial reserves. This verification helps lenders ensure the borrower can meet the initial financial obligations of homeownership and has adequate liquid assets.

Rental applications often involve VOD requests to confirm that prospective tenants have the necessary funds for security deposits and initial rent payments. This step allows landlords to assess an applicant’s ability to cover housing expenses. Similarly, other loan applications, including those for auto, personal, or business financing, use VODs to evaluate an applicant’s financial stability and repayment capacity.

In the context of financial aid applications for higher education, a VOD helps determine an individual’s or family’s available financial resources when calculating eligibility for assistance. For immigration purposes, a VOD may be required to demonstrate financial self-sufficiency, ensuring that an individual can support themselves without becoming a public charge. Additionally, certain business transactions, particularly those involving significant capital, may use a VOD as part of due diligence or as proof of funds.

The Process of Obtaining a Verification of Deposit

The process for obtaining a Verification of Deposit typically begins with the requesting party, such as a mortgage lender or landlord, initiating the requirement. They will inform the applicant that a VOD is needed to proceed with their application. The applicant then provides written authorization, often by signing a specific consent form or a section on the VOD request form, allowing their financial institution to release the necessary account information.

The requesting party, or sometimes the applicant, sends the authorized request form directly to the financial institution where the account is held. For first mortgages, lenders are usually required to transmit these requests directly to the bank, not through the borrower, to maintain the integrity of the information. The bank or credit union receives the request, verifies the authenticity of the authorization, and then accurately completes the VOD form with the required account details.

Once completed, the financial institution signs and stamps the document, then typically sends it directly back to the requesting party. This direct delivery method ensures the information’s integrity and prevents any alteration by intermediaries. The entire process, from request to delivery, is designed to provide an unbiased and official confirmation of an account’s status, generally taking a few business days.