Making a Deposit: Definition in Money and Banking

What Does "Deposit" Mean, Especially in the Financial World?

Depositing a Check with Mobile Phone
It's easy to deposit checks with a mobile device. Tetra Images/Getty Images

The term deposit is often used in financial transactions, but it can be used elsewhere. There are two primary ways to use the word deposit, both as a noun (or thing) and as a verb (or action).

Making a Deposit: Definition When Banking

When banks refer to deposits, they are simply talking about your money held at the bank. As a noun, a deposit is something that has been placed somewhere. That might be money that you’ve put into your bank account or jewelry placed in a safety deposit box at the bank.

The "deposit" is the result of some action that a person (or thing) took to make the deposit. Some common examples are below.

  • Cash placements (or money in the bank): I made a deposit into my checking account of $100
  • Funds in an FDIC insured bank account: your deposits are insured by the US government in case your bank fails
  • Security deposit: I have to pay the first month’s rent, and make a security deposit of $500 for my apartment (they’ll take the security deposit if I break something or disappear)

When used as a verb, the term deposit can also refer to the act of putting something somewhere. In the banking world, this happens when you add money to your accounts. Again, it can also refer to any other situation where somebody or something leaves something behind.

  • Adding money: I found $100. I’m going to deposit it into my checking account so I can build up my emergency fund
  • To drop something off: I’m going to deposit the rental agreement on the property manager’s desk

    In the first example above, you’ve deposited cash into your account. However, there are plenty of other ways to beef up your account — and they’re all considered deposits.

    More Examples in Banking

    For example, you can walk into a bank branch and hand checks payable to you to a live teller. You could also use an ATM (Automated Teller Machine) to deposit cash and checks, as long as your bank allows ATM deposits.

    You can even mail checks to your bank.

    Note that you generally need a deposit slip to make deposits with a teller. This sheet of paper tells the bank where to put the money and makes a record of how you're depositing money. You'll also need to endorse any checks. If using an ATM, no deposits slips or envelopes are required if the ATM is equipped with scanning technology that scans an image of your check.

    Electronic deposits are also an option. If your employer pays you by direct deposit, those funds go right into your bank account without you having to take any action. If you transfer money from one bank account to another, you’re also making a deposit into the receiving account. Finally, if you have a mobile device with a camera, you can deposit checks by using an app and submitting a picture of the check to your bank.