Bank deposits are funds put into your bank account by a cash or check deposit or an electronic transfer. You can make bank deposits into many different types of accounts, including checking accounts, savings accounts, money market accounts and certificates of deposit (CDs). Let's run through how bank deposits work and how to deposit money into your account.
How a Bank Deposit Works
A bank deposit is a sum of money that goes into a bank account. With most accounts, you can withdraw the money or use it for purchases as soon as the bank deposit is cleared by the bank, which can take one to two business days. With certain types of accounts, such as CD accounts, you must wait until the end of a preset term to access the funds.
You can make bank deposits in several ways. The traditional method is by visiting a local branch to deposit cash or physical checks. However, many deposits can now be handled electronically through account transfers, direct deposits and remote check deposits. If you're employed, your employer may make regular bank deposits of your paycheck directly into your bank account.
How long it takes for money to show up in your account after depositing cash depends on the deposit method used. Below are ways to deposit cash and how long it takes to be available.
| Bank Deposits by Type | ||
|---|---|---|
| Deposit Method | How It Works | Deposit Time Frame |
| Cash | A bank teller or ATM counts your cash and deposits it into your bank account. | Cash may be available immediately or the next day. |
| Paper checks | Your financial institution sends an image of the check to the payee's bank or a clearinghouse to request funds to pay the check amount. | Up to $225 should be available by the next business day, but the rest of a check could take another business day to clear. |
| Electronic fund transfers (EFTs) | EFTs are digital money transfers, which can include online transfers, paycheck direct deposits and peer-to-peer money transfers. | Electronic transfers at the same bank may process immediately, while external bank transfers can take a few days. |
Types of Bank Deposits
Bank deposit types fall into two categories: demand deposits and time deposits. Here are details on how both work.
Time Deposits
Time deposits are a sum deposited into an account that earns a fixed rate of interest for a set term. An example of a time deposit account is a CD, where you get a fixed rate for a term that can range from a few months to several years. While CD accounts tend to earn a higher annual percentage yield (APY) than checking accounts, they aren't as flexible. You may get charged an early withdrawal penalty if you draw money from a CD before it matures.
Demand Deposits
Demand deposits are a sum deposited into an account that you can draw money from regularly as you need it. Checking accounts are a type of demand deposit account where you're not penalized for making regular withdrawals, but you also might not earn much interest.
Since checking accounts let you take out cash "on demand," they make sense for everyday spending money. Alternately, time deposit accounts could be a good place to sock money for a long-term goal—like saving for a home or car—since you'll earn a better return while cash is sitting.
How to Deposit Money
You can deposit cash at a bank branch or ATM. Online banks might also partner with certain retailers where you can deposit cash at the register. Physical checks can be deposited at local bank branches by using ATMs or by using mobile check deposit. The mobile check deposit process usually involves endorsing the check, taking a picture of your check's front and back and then submitting the deposit request.
To receive electronic deposits, you may need to share your account information with the entity sending you payments. For example, an employer may have you fill out a direct deposit form to set up Automated Clearing House (ACH) payments. For tax refunds or Social Security benefits, you'll need to share your bank account number and routing number with the tax authority or Social Security Administration. The IRS and Social Security Administration have directions on how to set up direct deposit payments on their respective websites.
The Bottom Line
Bank deposits put money in a bank account that you can use for everyday spending or save for emergencies and big purchases. You can add cash to your account using many different methods, including several online options. Using remote check deposit, setting up paycheck direct deposits, making an online transfer and accepting peer-to-peer payments can help increase your account balance without the need for a bank visit.