Proof of Deposit (POD)

The term proof of deposit (POD) has a couple of applications in the financial realm. The first is a verification that funds have been deposited into a bank account. This is commonly used when applying for a mortgage to buy a house. The mortgage company will want to see that the borrower has accumulated the necessary reserve amount in order to provide the down payment for the home. To verify this, the borrower will need to provide a proof of deposit to the mortgage company. The proof of deposit can be obtained from the bank.

The second use of proof of deposit is to verify the dollar amount of a check or draft being deposited is correct. Proof of deposit is accomplished when the amount written on the check is compared to the amount on the deposit slip. This is the second step in the process of check presentation for payment after checks have been sorted by a reader-sorter machine.

When buying a home, the mortgage lender may ask the borrower for a proof of deposit, verifying the funds required for the home purchase are accumulated in a bank account and accessible to the lender. During times of tight credit, the lender may also want to see verifications of how the funds became deposited into the bank account and where the money came from. They may also want to see proof of several months of cash reserve on hand in another account to ensure the borrower can still pay the mortgage if they lose their income stream.

When dealing with deposits into an account, the proof of deposit is done after all of the checks have been separated by the sorting machine into either the "on us" category or "on them" category. This second step is the only procedure in the check processing process that is not completely automated. Check proofing is a manual process that is done after check sorting is complete and the routing and account numbers on the check have been recorded by the sorter.