Disclaimer: This post contains references to products from one or more of our advertisers. We may receive compensation (at no cost to you) when you click on links to those products. Read our Disclaimer Policy for more information.
Deposits happen every single day. If you think back on your last deposit, it probably happened within the past few weeks, that’s how often they occur.
Furthermore, if you successfully completed a deposit, you know exactly what to do to initiate and follow through with the process.
If you don’t though, you may have a couple of questions about the transfer transaction. That’s quite alright.
Everyone starts somewhere, and when it comes to getting your financial situation right, it’s better to ask questions now and be on the right path, then to assume and be wrong later down the line.
Let’s cut to the chase. If you need more information on what a deposit is, keep on reading.
What Is a Deposit?
Simply put, a deposit is a fancy finance term indicating that money is held at a bank. If you successfully complete a deposit, you are transferring money into an account to hold it there for future purposes. All you’re doing is placing the funds into your account so that you don’t have to monitor it 24/7.
>> More: How to Deposit a Check
How Do Deposits Work?
This kind of deposit is associated with and still belongs to the account holder, who can save the money, transfer it, or use it for purchases.
Deposit in Person
To deposit in person, head to your bank or credit union and approach one of the tellers at their station.
Fill out a deposit slip with your account number and the amount of money you’re depositing or cashing.
This will tell the teller exactly what to do with the funds. Plus, the deposit slip acts as a receipt for the transaction, a paper trail, if you will.
Next, you’ll want to endorse the check, meaning you’ll sign your signature under the “endorse here” section on the back of the check. The teller will take care of the rest.
If you prefer not to go in person, there’s always the option to mail in checks or money orders to whatever bank you use.
Just call in to your bank and ask them which branch is the best and fastest to service. If they have additional rules, regulations, or suggestions, just be sure to abide by them and ask any questions before mailing the funds in.
Whatever you do, do not send cash through the mail. Legally, you can send cash through the mail, but it’s highly not recommended, seeing as the money could easily get lost or be stolen.
Electronic deposits are the easiest but aren’t always readily available. If you’re signed up for electronic deposits through your employer, the funds from the check will automatically be deposited into your account on the contracted day. Once deposited, you can use the funds immediately.
>> More: What Is a Mobile Check Deposit?
Types of Deposits
Believe it or not, there are actually two types of deposits that people should be familiar with.
- Demand Deposit: This type is commonly known as a checking account. With a demand deposit, you’re placing funds from a check or cash into an account that only you can withdraw or access at any time.
- Time Deposit: This type is held by the bank for a certain amount of time, gaining interest regularly. Depending on the bank and depending on the deposit will depend on the length of time the funds will be held for. To be safe, I highly recommend calling your specific branch to find out more information on this type of deposit. Most of the time, if you need to access funds from an account with time deposits, you’ll have to notify the bank that you’ll be withdrawing soon.
>> More: Compare the Best Online Banks
What Are the Advantages of Deposits?
Deposits are great; you’re able to place the funds you have where you’d like and access them at any time (mostly).
The money is yours, secure in a bank account, if all the steps are followed through correctly.
What Are the Disadvantages of Deposits?
There are still disadvantages of making deposits, though. Say you go to the bank with a check, and you want to deposit it into your account to access the money later on.
Your bank may or may not put a hold on the funds just in case the person who wrote the check does not have the money in their account to be transferred. Just ask a teller at your local branch what their policy is on accessible and available funds.
Sometimes, this can be a good thing, as the waiting period will omit any penalty fees, you’d have to pay for cashing a check with insufficient funds.
Bottom Line: What Is a Deposit?
Basically, a deposit is just something we should all know as financially knowledgeable adults – who are growing and learning every day.
Knowing what a deposit is will help you keep your finances in check and on the right track.