Published in: Banks | July 8, 2019

How to Deposit Cash to an Online Bank

Online banks can be great -- but depositing cash can be a hassle. Here are some ideas for how to get cash into your online bank account.

Burlap bag full of $100 bills.
Image source: Getty Images

There are a lot of advantages to opting for an online bank as your financial institution, including the fact that internet banks often charge fewer fees and pay more interest. But there’s also one big downside to consider: It’s hard to get cash into an online bank.

Most online banks allow you to deposit checks via mobile deposit or by mail, and you can move money to and from other financial institutions. But depositing cash is trickier. It’s a bad idea to put money in the mail, and internet banks typically don’t accept mailed deposits. And you can’t go to a local branch to hand your money to a teller.

The good news is you don’t have to give up on having an online bank -- or never deposit cash. You have a few options, depending on your online financial institution.

Each of these options has pros and cons. Let’s take a closer look.

Use a linked ATM

Some online banks participate in ATM networks. If your online bank is one of them, look on the bank’s website to find the closest ATM.

Once you’ve found an ATM, take your cash to the ATM, fill out a deposit slip with your account information, and put the money into the deposit envelope. Then use your ATM card to make your deposit.

You’ll receive a receipt when you deposit cash into an ATM. Keep the receipt until your money shows up in your account. This could take around 48 hours depending on your bank’s policies.

Use a prepaid debit card

If your bank isn't part of an ATM network, you could consider getting a prepaid debit card linked to your online bank account.
Prepaid debit cards allow you to load money onto them in different ways, including visiting participating retailers to make cash deposits. Once the money is on your debit card, you could transfer the money from the prepaid debit card to your linked online bank account.  

The downside of prepaid debit cards is that many charge you fees for getting the card, depositing cash, or withdrawing funds. But if you shop around for a good card, you may be able to avoid paying fees. Some prepaid cards, for example, allow you to deposit cash for free at certain retailers, including Walmart. You can then use those cards to transfer money to a linked bank account -- although the process can take several days.

Make a local deposit and transfer money

If you still have a local bank account, you can make a deposit at your branch and transfer the money over. Unfortunately, some banks charge you a fee to move money from one financial institution to another. Make sure your bank doesn’t before you do this.

This method could defeat the purpose of opening an online bank account since you’d still be stuck with a local bank and all its associated fees.

If you have a family member or close friend with a local bank account, you could enlist their help in making a local deposit. You could give them cash to deposit into their account and ask them to send the money to you using a service like Zelle or Venmo. These money transfer services are free and can be linked to your online bank.

Buy a money order

If you can’t use an ATM, don’t want a prepaid debit card, and can’t get a friend or a family member to help you out, you could buy a money order.

Money orders can be purchased from the post office or retail stores. There’s a small fee for buying a money order. The fee depends on the amount of the money order. Once you’ve purchased the money order, you can mail it to the address that your online bank provides for deposits.

This method costs a little bit of money and it can take time since you have to wait for the mailed money order to arrive at your bank and for the deposit to be processed. Still, if you have only a very occasional cash deposit to make, this could be a good approach.

Choose the right approach for depositing cash to an online bank

As you can see, depositing cash to an online bank is more trouble than when you have a local bank. But since online banks have many other advantages, it may be worth dealing with a few extra steps. Especially if you don’t deposit cash on a regular basis.  

There are solutions available when cash does need to go into your account, so you can make online banking work for you even when you’ve got some paper bills you need to deposit.

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