Several large banks no longer allow you to deposit money and coins in someone else’s current account unless you become a co-owner.
While the adoption of the policy is at the discretion of each bank, there is a reasonable chance that you will be affected. The biggest banks – Bank of America, Wells fargo and JPMorgan Chase – have no-cash policies for unauthorized persons.
In the eyes of banks, the decision to ban cash makes it possible to avoid money laundering and fraud – money is hard to trace after all. It is also expensive to process. For you, politics can interfere with anything you want to do. Now for the good news. If your bank does not allow you to deposit money into someone else’s personal account, you have other options to achieve the same result.
Under the Banking secrecy law, financial institutions must take certain steps to detect and combat money laundering, such as reporting suspicious activity and transactions involving more than $ 10,000. But the adoption of certain policies – such as preventing consumers from depositing money into other people’s accounts – is at the discretion of each bank, said Steve Hudak, spokesperson for the bank. Financial Crime Network.
“It is up to the bank to have policies and procedures in place to be able to file these reports and this is also risk based,” says Hudak. There is no rule that says precisely what transactions banks can accept, but they must base their policies on risk.
Five alternatives to cash deposits
While you may feel awkward, you have alternatives, some of which are faster than depositing physical money into someone else’s account at a branch.
1. Make an electronic transfer
You can easily transfer money to a friend or relative’s account through a service like Venmo, Pay Pal or Square silver. Zelle is also a good option to transfer money to someone else’s account. Bonus: Your bank – and the person you’re sending money to – may already offer Zelle in their mobile app or online banking, so you won’t need to sign up for another account.
However, take care when using any of these digital options. When you send money to someone else through these types of services, the payments are often irrevocable. Send money only to people you know and trust to avoid being scammed.
If your bank does not offer Zelle, you can still send an electronic bank transfer through your online bank account in another way. Instead of entering an email address or phone number like you do through Zelle to send money to someone, you will likely need to enter the recipient’s bank account number and routing number to make a transfer. While Zelle transfers money within minutes, this type of bank-to-bank transfer can take a few days.
2. Write a check
While paper checks are falling out of favor, you can still deposit a personal check in someone else’s personal account.
Of course, check fraud is possible. However, checks are less of a threat to banks than cash deposits because financial institutions can trace the money.
“The key question is always, ‘Where did you get this money? Says Marc Trépanier, Senior Fraud Consultant, ACI Worldwide. “With a check, we know where it comes from. It was from another account.
The person receiving the check could also deposit the money through a mobile banking app to avoid a branch visit.
Unlike cash, the downside is that your bank won’t always make the funds available immediately.
“The check can be cleared and settled within hours depending on the circumstances,” says Bob Meara, senior banking analyst at Celent, a financial services research and consulting firm. “But most banks wait a business day for funds to become available to most customers just so they can see if the check clears.”
Each bank will make a risk management decision to decide its policy.
3. Send a mandate
If you don’t want to use a personal check to deposit money into someone else’s account, sending a money order is an old-fashioned alternative.
You can buy money order at banks and credit unions, a U.S. post office, some big box stores, and more. It will cost you, but the price is relatively cheap. For example, the United States Postal Service (USPS) charges $ 1.25 for the purchase of a money order up to $ 500 (as long as the destination is in the United States).
The method of payment is secure: you will receive a receipt for your money order. Even if a money order is lost or stolen, you can usually replace it.
[READ: How to fill out a money order]
4. Add an additional owner to your account
Giving someone direct access to your bank account is perhaps one of the easiest ways to transfer money between your accounts. But like a joint credit card, joint ownership of a bank account can cause problems, especially if something is wrong with the relationship.
“When opening a joint account, it is important to keep in mind that both parties are equal owners of the funds in the account and have access to them without the consent of the other,” says Luis Rosa , CFP, founder of Build a Better Financial Future, a financial consulting firm in Henderson, Nevada. “If the relationship deteriorates, one party may deplete all funds in the account, leaving the other party without their share of the funds.
5. Find out what other banks are offering
Not all major banks have a policy against depositing money into someone else’s personal account. PNC Bank, for example, still allows this practice.
In addition to the ability to deposit money into someone’s personal account, another bank may offer other benefits, such as better prices on CD, savings accounts and mortgages or even a more useful mobile app.
“Look for the bank known to be the most consumer-centric,” says Ciaran Chu, Cloud Payments Manager at ACI Worldwide.
– The discount rate Amanda Dixon wrote the original version of this story.