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Know when the check clears with smartphone deposits

Depositing a paper check by shooting a picture with a smartphone app looks like a snap.

It’s a banking gizmo that’s grown in popularity since first being introduced in a limited way in 2009. But it’s key to know that rules and gotchas at some financial institutions could lead to more delays for accessing the money than you might expect.

At the extreme, for example, would any consumer dream that it would take 10 days for a mobile deposit to clear on some accounts?

It does with Walmart’s GoBank account, a smartphone-friendly, lower-cost checking product rolled out with much fanfare last year.

The account, offered through a partnership with Green Dot, allows consumers to deposit cash at participating Walmart stores. But consumers must use direct deposit for checks or take a photo of the front and back of checks to deposit using a mobile app.

If you make a deposit with a mobile app, GoBank will make money from that deposit available 10 business days after the day of deposit.

The Pew Charitable Trust is concerned that based on its research many banks and prepaid cards don’t clearly tell consumers upfront when they open accounts just how mobile remote deposits will work at a specific institution.

“The disclosures are not very good,” warned Susan Weinstock, who directs Pew’s consumer banking project.

Smartphones, of course, give consumers the chance to skip the teller or ATM line. Banks like the technology as a way to control branch costs.

“Given the growth of smartphones, it seems like this will be something more and more consumers will use,” Weinstock said.

To be sure, most banks typically make money available quickly. Generally, funds deposited by a set cutoff time would be made available the next business day for remote mobile deposits, according to Javelin Strategy & Research.

Cutoff times can vary. It’s 10 p.m. Eastern for PNC Bank. At Bank of America, the cutoff time for mobile device deposits is based off of the time zone in which the account was opened. Checks received by 9 p.m. eastern are considered deposited on that day, if in the Eastern or Central time zones.

Comerica Bank customers can have the account fully credited the next business day, if the mobile deposit is made before 7 p.m.

But some checks are subject to a hold.

A bank’s specific policy on check holds will greatly influence how soon your money is available, even with a mobile deposit, said Greg McBride, senior analyst for Bankrate.com.

A hold can be applied for all sorts of reasons: Suspected fraud, large deposit amounts, frequent overdrafts or some indication that the deposited check is likely to bounce.

It helps to know some other limits, too.

Typically, banks limit the total dollar amount that can be deposited with a mobile device on a given day or within 30 days. The amount can vary based on the customer and the bank.