One question that comes up frequently about prepaid cards is whether it is possible to make an ATM deposit to load money on a prepaid debit card. The answer, for most prepaid cards, is “no”. Here’s why.

[ad#Google Adsense]Before we get into the details of why most prepaid debit card accounts cannot receive deposits at an ATM, it’s important to first understand the difference between ATM Cards, regular debit cards, and prepaid debit cards.

An ATM Card is a card issued by a bank that allows you to access a Savings or Checking Account at the bank’s network of ATM machines, or at ATM’s in the bank’s network (such as the Interlink network operated by Visa). Depending on the bank rules, you can usually use the bank’s ATM machines to make deposits into your account. Some banks have partnered with other banks (such as through the NYCE Shared Deposit Program) to allow customers to make deposits at the ATM’s of other banks in the program.

ATM Cards can not be used to make purchases at retailers. They are simply access devices that allow you to access your bank account.

An account-linked Debit Card is a debit card issued by a bank to customers who have a checking or savings account at the bank. An account-linked debit card has more features than an ATM card and is essentially an ATM Card on steroids – allowing you to access your savings or checking account at ATM machines (and make deposits at ATM locations of the bank or the bank network) and also allowing you to make purchases everywhere Visa or MasterCard debit cards are accepted (depending on which logo is on your card). The purchase amounts are deducted from your checking or savings account.

Like ATM cards, account-linked debit cards can allow you to make deposits at an ATM, but only if your bank allows it and typically only at Automated Teller Machines owned by your bank.

Prepaid debit cards are more similar to account-linked debit cards than to ATM cards. Prepaid debit cards allow you to use ATM machines to withdraw cash. They also allow you to make purchases at retail locations that accept Visa or MasterCard cards (and, depending on the card, Discover locations as well).

However, most prepaid debit cards cannot be used to make deposits at an ATM. Here’s why – the financial institutions that issue prepaid debit cards typically do not have retail branch locations. As a result, these banks do not have a network of their own ATM machines. Since prepaid debit issuers do not have their own ATM machines, most do not allow you to deposit funds at ATMs. The reason is that it is expensive and complicated for banks to allow you to deposit money at the ATM machines owned by other banks.

As prepaid debit card use grows, however, it is possible that some issuers will allow ATM deposits.

Until then, the best ways to load money onto a prepaid debit card are to use direct deposit, or to use one of the other reload options provided by your prepaid card issuer.