What is a Remote Deposit?

Malcolm Tatum

A remote deposit is a type of bank deposit that is conducted electronically, rather than physically delivering a check to the bank and going through the usual routine of manually making the deposit. Over the years, this type of deposit activity has become increasingly popular, with many businesses using this type of electronic deposit to pay consultants and other business services. Unlike some other methods of making electronic deposits, the remote deposit involves creating a digital image of the actual check and then transmitting that image to the recipient bank, along with the data necessary to complete the deposit process.

A remote deposit is made electronically, rather than having the customer physically deliver a check to a bank.
A remote deposit is made electronically, rather than having the customer physically deliver a check to a bank.

The remote deposit is an online banking solution that is different from several other approaches in common use today. For example, this type of deposit activity is not like a direct deposit in which an employer generates a payroll and then transfers funds from a payroll account to the bank accounts of employees. A remote deposit is also different from online check writing in which a vendor allows a customer to provide a check number, bank routing number, and account number via an online interface in lieu of submitting an actual check. While all three methods help to minimize time spent on receiving, recording, and depositing a check, each of these strategies works better with specific applications.

A special scanner can be used to provide a bank with sufficient information to process a paycheck.
A special scanner can be used to provide a bank with sufficient information to process a paycheck.

At present, the number of banks that issue and receive checks by remote deposit are somewhat limited. This is because this particular type of electronic deposit is not recognized in all nations. Since the beginning of the 21st century, more nations have developed regulations that help to govern the use of this type of deposit, paving the way for additional banks in those countries to accept this form of deposit as valid. In the United States, the use of the remote check was made possible by the passing of the Check Clearing for the 21st Century Act, also known as the Check 21 Act, which was passed in 2004.

One of the benefits for small business owners is that the remote deposit makes it unnecessary to actually go to a bank and physically deposit paper checks received through the mail or from customers at a retail store. The digital image of the check is considered legal, making it possible to submit those digital images to the bank as an electronic deposit that is conducted either from home or the business, assuming the bank receiving the deposit has developed a platform to manage deposits of this type.

Another practical advantage to the remote deposit is that there is no longer a need for banks to pass paper checks back and forth. This means that in the event of some sort of natural disaster that would make it impossible to receive checks by mail or to physically visit a functioning branch of the receiving bank, the banking process can continue in spite of the adverse circumstances. As a result, there are no lost checks in the mail and no delays in receiving payment for services rendered.

Discussion Comments


@Animandel - You remind me of my grandmother. She still refuses to have her retirement checks deposited directly into her bank account. Once a month, he goes to her mailbox at the post office and picks up her check. Then she goes to the bank and deposits it into her account.

I guess new ideas are harder for some people to get used to than for others. However, I have finally convinced her that there is little danger in going online and checking her account balances.


The article makes the remote deposit sound great, and maybe it will be the way we all make deposits in the future, but I'm not sure I want to go that route yet.

This is something I have only recently begun to learn about, so I am no expert, but I worry that this way of making deposits might not be secure. Don't ask me why I think this. Like I said, I don't know the specifics of remote deposits like this. Still, I prefer to wait until all of the glitches are out of the system, and I am more confident that there won't be any mishaps.


I deal with a lot of people in my business, and most of them pay me by check. I like the idea of being able to make deposits remotely for my business banking. This way we aren't constantly running to the bank to make deposits and we don't have to worry about keeping all the checks in a safe place so we don't lose them before they reach the bank. Sign me up.

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