Night Depository

A Night Depository is a dropbox a bank installs just outside it to enable account holders to deposit cash, checks, coins, and credit card slips after the standard operational or banking hours. These overnight drop boxes are secure, and banks collect all the deposits customers drop in these boxes on the next business day.

The service is mostly used by service providers and small businesses that usually deal in cash and prefer to deposit money in their bank accounts manually. The normal bank timings are from 09:00 a.m. to 05:00 p.m. Account holders use night depositories after the working day concludes. They pay a fee for this service.

• A night depository is an overnight deposit box that banks install for account holders who wish to make deposits outside regular banking hours.
• It is not open to everyone. Only account holders who pay for this service can access these deposit boxes. A key unlocks the box, and the deposits are made in special secured bags.
• Account holders who wish to use this service must sign a night depository agreement, which briefly explains the roles and responsibilities of the bank and the account holder.
• No limits are imposed on cash or the number of checks deposited in such boxes; it also accepts coins.

A night depository is a small drop box installed outside a bank branch where account holders can safely deposit cash, checks, and other items like credit card bills outside banking hours. An account holder willing to use the service must sign a night depository agreement with the bank or financial institution. When account holders take up this service, they are typically charged a fee for it. In exchange, they are given special lockable boxes, bags, or envelopes to securely put their money in with important details such as account number, amount, number of deposits, etc., for banks to process such deposits.

The bank opens the following business day, and the staff collects all the deposits dropped inside the box, making their way safely inside the branch. The deposits are logged in, ensuring accurate entries, with the final step in this process being deposit processing. It is important to understand that the cash or checks deposited in the dropbox are only processed on the next business day.

Contrary to popular belief, several people still, in the present age of online transfer, net banking, and digitalization, like to make manual deposits by walking up to a bank branch both during and outside banking hours. A night depository safe serves its purpose by offering customers access to depository services. Not every bank needs to have a night depository service. The terms of availability of this service, the deposit processing methodology, and the fees charged differ from one bank to another.

The features of a night depository are:

• Banks offer overnight deposit services, but these deposits are only processed the following day.
• Account holders can drop cash envelopes, checks, and credit card slips.
• The service is available 24 hours a day, seven days a week.
• All night deposits are recorded on a log sheet and verified to ensure correct processing.
• The night boxes are opened each morning from Monday to Saturday, but this varies from bank to bank.

Here are two examples of night depository safe boxes.

Example #1

Suppose Gilbert has a grocery store with a good customer footfall, resulting in a rapidly growing business. However, the shop is in a shady locality with a high crime rate. Therefore, Gilbert shuts down his shop at 9 p.m. every day and walks up to the local bank where he has an account. Every day, Gilbert deposits the money in a dropbox. Since it is just outside the branch, it is more secure than his shop or home.

The deposits are securely dropped inside the box, and Gilbert's deposits are processed the following morning when the bank opens at its usual time. To use this service, Gilbert pays a small fee to the bank.

Example #2

In 2019, the police arrested a man accused of several night depository thefts in Calgary, Canada. He continued to steal for approximately three weeks, from July 12 to August 6. He was accused of visiting multiple banks in the city to access the night depository boxes. The accused was charged with eleven attempted thefts in Calgary and three in Chestermere and Airdrie. He used various methods to try and break open the boxes. The failed attempts to steal from these night depository boxes show they were well-protected to thwart theft.

The advantages of night depository are:

• This service allows account holders to make cash deposits outside banking hours.
• They are considered safe as banks have special, secure, lockable boxes or bags for such deposits.
• It helps business owners deposit cash they would otherwise be forced to keep inside locked shops and offices, exposing them to risks.
• Checks, credit card slips, and cash can be deposited in these boxes. Typically, there is no deposit restriction or limit.
• From the bank's perspective, this is a fee-based service that brings them additional revenue (as they charge account holders for this service).

The disadvantages of night depository are:

• Account holders who drop their deposit bags in the dropbox need to trust bank employees completely with respect to the timely collection and processing of deposits the next day.
• Account holders are required to provide sensitive information like account number, number of deposits, total amount, etc. while making deposits. 
• The money dropped in the night depository will only be processed on the next business day.
• Banks charge an additional service fee, which can prove expensive for certain account holders, especially if they run small businesses.

The key differences between night depository and ATM are:

• A night depository is used for deposits, checks, and credit card slips, while Automatic Teller Machines (ATMs) are typically used for withdrawals, fund transfers, and balance inquiries.
• Night depositories are located only on the bank's premises. ATMs are located in various places across cities, districts, and even the country.
• Generally, all account holders need and opt for ATM services, but not all account holders require a night depository service.
• Safe boxes and special lockable bags are used for night depositories. Banks issue plastic cards or debit cards to facilitate transactions at ATMs.
• Every bank has a limit on ATM withdrawals, but there is no such restriction on the amount of cash or the number of checks deposited in night depository boxes.

This article has been a guide to Night Depository and its meaning. Here, we explain it with its examples, features, advantages, disadvantages, comparison with ATM. You may also find some useful articles here -

• Banking Fundamentals
• Bank Identification Number
• High Street Bank