About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Best Ways to Deposit Cash Into an Internet Bank Account

With ING Direct finally launching CheckMate for online check deposits, it becomes easier to use ING Direct for all of your banking. There are fewer reasons that you need a local brick-and-mortar bank. However, there's one reason to keep your local bank. It's much easier to make cash deposits. Most all internet banks allow you to deposit checks by mail, but that's not an option for cash.

Local Bank or Credit Union

My preferred method to deposit cash into my internet bank is to first deposit the cash into my local credit union or bank account. I can then initiate an ACH bank-to-bank transfer from my internet bank. This might not be a good option for some people who don't live close to their bank or credit union. With many banks adding monthly fees, people may be closing their accounts at their local banks.

Deposit Taking ATM

Another option for cash deposits is using an ATM that can handle cash deposits. Big banks like Chase and Bank of America have ATMs that can take cash. Some ATM networks like MoneyPass also have some ATMs that can accept cash. Even if your bank or credit union has a nearby ATM that accepts cash, you may not want to use it. If the ATM gets jammed when you feed it your bills, it can be a hassle to resolve the issue.

Mailing a Money Order

Another way to deposit cash into an internet bank account is by first purchasing a money order. Then you can mail the money order to the internet bank just like a check. One problem with this is that it usually costs money to purchase a money order. For example, the U.S. Post Office charges up to $1.55. Some people may have access to cheaper options. If you live in Florida, Amscot - The Money Superstore offers free money orders. My guess is that Amscot uses free money orders as a marketing strategy to attract more customers for their cash advance service.

Not all internet banks accept money orders. ING Direct is one that does not accept money orders for deposit. I just confirmed that by email last week. I checked with several other internet banks with popular checking accounts, and all of them say that customers can mail money orders for deposit. These include Ally Bank, EverBank, Bank of Internet USA, Incredible Bank and Clear Sky Accounts.

PerkStreet Financial

The only internet bank that I've found to provide a cash deposit option is PerkStreet Financial. They have a contract with MoneyGram which has 18,000 locations nationwide, including every Wal-Mart store. You can deposit cash into your PerkStreet checking account via a MoneyGram Express Payment. PerkStreet picks up the fee.

Consider a Local Bank or Credit Union Account

There are some advantages in having a local brick-and-mortar bank or credit union. If you want to avoid monthly fees without a large balance at a big bank, you may want to consider a plain savings account. These sometimes have smaller minimum balance requirements. One example is Chase Bank which waives monthly fees on its Chase Savings account for a minimum daily balance of $300. Bank of America also has a $300 minimum balance requirement to avoid a monthly fee on its Regular savings account. Don't forget that all savings accounts limit certain withdrawals to a maximum of 6 per month. Some banks will hit you with a fee for even fewer withdrawals. For example, Bank of America charges a fee for more than 3 withdrawals per month.

If you want to avoid the big banks, consider a credit union. Most credit unions have free checking accounts with no monthly fees. Also, many credit unions are part of a shared branch network (CU Service Centers). For more information, please refer to my post Finding the Best Free Checking Accounts at the Best Credit Unions.

In addition to making cash deposits, there are other reasons that it can be helpful to have a local bank or credit union. Some offer free notary service, free coin counting machines, and paper shredding. What services do you use at your local bank or credit union?

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  |     |   Comment #1
Ken, you always going to need a local bank, not only as a point of entry of checks and cash, but at times when your Internet or electric power or your computer is down or malfunctioning.
Also, local banks can provide other valuable service like, notary, official checks, as guarantor for signature and many other services.
You can never be online only customer, what about if the Internet bank is hacked or their web site is out or there is an error or there is a false entry or there is disputed charge, by the time all is sorted out, you may be out of money waiting for online bank to be available again.
With my local bank I can pull money from my Internet bank account and continue to live like nothing ever happened.
Something to think abut now, not when the disaster strike.
  |     |   Comment #2
I agree with #1, Monday, April 30, 2012 - 2:32 PM. There will almost always be a need for a local brick-and-mortar financial institution to conduct the other items mentioned above. Also a safe deposit box located nearby is quite handy to keep important papers and valuables secure. I also deposit any cash into a checking account at a locally-owned bank. Where upon, if needed I initiate an ACH transfer to my online bank.
  |     |   Comment #3
I'm generally in agreement with the earlier two comments.  I have a local (small) bank and cannot imagine being without my accounts there.  At the same time, I give my local bank virtually none of my profitable (for bank or CU) business.  I worry that eventually, if others are operating as I do, the local bank will be unable to provide the service they offer me.  Their costs are high, their profit, from my transactions with them at least, is quite small . . . if indeed they have any at all.
  |     |   Comment #4
I now depsoit all my checks at the Chase ATM.  It is easier than going inside the bank and faster and NO lines. No forms that can get lost or stolen at the bank.  You can deposit the checks 24x7  Put in your card and the checks.  Get a receipt with the check images printed on it I.  The rare exceptions I need a branch are for a signature gurantee or an offical check.  The safe deposit boxes are getting too expensive and if the bank is robbed they will not insure you in anyway.  I just have a safe in the house.  I'm sure one could get away from offical checks by using ACH or have an ATM print one (In work we have an ATM that dispenses large amounts of travelers checks) and make some notraies (They are a dime a dozen) be allowed to do signature gurantees.  If these 2 items can be addressed I would not need a bricks and motor bank. The on-line systems have excellent availability.


  The online systems are reliable so I'm not worried about access to my money. 


  |     |   Comment #5
A bank could mail out offical checks.
  |     |   Comment #6
Totally agree that we will always need a 'local' bank, but will there always be a 'local' bank? For some reason, the way things are evolving, I don't think so. Then what?
  |     |   Comment #7
To Anonymous - #4,

I guess you have been lucky so far and have not have any illegal charges on your debit card and your home have not been under long time power outages.
My Internet account was frozen do to unauthorized charges and I could not use my account for 17 days. To put salt on the injury, we had a local tornado that put down the power lines for 2 weeks last autumn and some of my mail correspondence never reached the Internet bank and I had to re-mail everything for a loan that put a delay of 18 days.
These are just few mishaps I had with an Internet bank and hope you never go through this, but will happen one day, so be prepared now.

To Anonymous - #5,

Have you ever ordered an official check from Internet bank?
I have, unless you pay $25 for overnight delivery, be prepared to wait 5-7 business day for the check to arrive.
  |     |   Comment #11
I have very rarely ever used any brick-and-mortar services. The checks mail out fine, I've never needed to "rush" a check... My life is online. That may be "bad" but it works well for me :)
  |     |   Comment #12
I can take a photo of all my checks for very fast deposits. Brick and mortar WILL NOT last much longer. I NEVER pay a fee with my online account! Wish someone would figure out the minor convern over depositing cash. It would be easy enough, just let me deposit cash at BOA, at their ATM, and wire the money for me. No need for brick and mortar just ATM's that take cash, done.
Anonymous and Jaded
  |     |   Comment #13
The irritating part, is I work, I produce a product, I deliver a service, I fulfill my contracts, I get paid I have money, THEN in order to spend it I need a bank! We need some kind of change, revolution if you will, to return the power of the resource holder. The money is mine and I deserve every bit of it pending the legal taxes and obligations that otherwise are part of doing business... but there is no good reason that I should be required to use a financial network that is built on ubiquity and nothing else.
  |     |   Comment #14
The solution will be Bitcoin, once more people are using it and are paid with it. This will remove the middleman from the equation.

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