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4 Downsides of Using Mobile Deposit

Managing your savings and checking accounts can be a lot easier these days thanks to innovations like online and mobile banking. One of the newest tools that banks are rolling out is mobile deposit, which allows you to add money to your account by taking a picture of it with your smartphone.

While mobile deposit can be convenient, it’s not without certain drawbacks. SmartAsset takes a brief look at the potential disadvantages of using mobile deposit.

1. It Can Take Longer for Funds to Hit Your Account

Generally, when you deposit a check at the drive-thru or teller window, you can expect to see at least some of the money credited to your account that same day. When you deposit a check from your mobile device, it may take a little longer for your funds to become available based on what time of day the deposit was made. For example, mobile check deposits made after 6 p.m. Pacific time on business days to at least one major bank can’t be used until two business days later.

Aside from the processing cutoff times, there are a few other things that can potentially affect how long it takes for the money to show up in your account. If you’re a new customer, you’ve racked up multiple overdraft charges, the deposit is for more than a certain dollar amount (say $50,000) or the bank believes that the check won’t be honored, you may have to wait as long as a week for it to be verified before the deposit clears.

2. Some Banks Limit How Much You Can Deposit

Mobile deposit’s usefulness may only go so far if you’ve got multiple checks you need to deposit each month. Some banks require you to make your deposits at an ATM or in-person at a branch once you reach a certain number of transactions or a specific dollar amount.

Each bank sets its own policy on how much you can deposit from your mobile device and in some cases, it depends on how long you’ve been a customer. Truist, for instance, limits mobile check deposits to $1,000 per check and $3,000 per month if your account has been open for six months or less. At Citibank, the limit for new account holders is $500 per day or $1,500 per month.

3. You May Be Charged a Fee

While most banks offer mobile deposit services at no charge, others impose a small fee. At least one major bank charges a fee, currently set at $0.50 per transaction.  You may have to pay a fee if you have an account at a smaller community bank or credit union, so it’s a good idea to read over your account agreement before you begin using mobile deposit. While it doesn’t seem like a lot, you could easily be nickel and diming yourself if you use mobile deposit on a regular basis.

4. Security Is Not 100% Guaranteed

Banks are more cautious than ever these days when it comes to protecting their customers’ information but there’s always the possibility that a cyber thief could get his or her hands on your account details if you use mobile deposit.

To minimize the risk, it’s a good idea to avoid storing your username or password in your phone’s app and only log in to mobile banking services using a secure connection. Something as simple as putting a lock code on your smartphone can keep a random stranger from accessing your account if your phone gets lost or stolen.

Final Word

If you don’t have time to stand in line at the bank, mobile deposit can be an efficient way to manage your money. Just be sure you’re clear on what your bank’s policies are before you start snapping away with your phone.

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Photo credit: flickr

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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