What Is a Warm Card?

Warm Card Explained

Employee using a card at an ATM
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A warm card is a debit card that allows business employees to make deposits into business accounts. They can also be referred to as deposit-only cards, since they allow employees to add money to business accounts but prohibit them from making withdrawals or purchases.

If you run a business, warm cards are one tool you might use to help manage deposits. If you're an employee of a business that uses warm cards, it's important to understand what they do—and don't—allow you to do.

Definition and Example of Warm Card

A business bank account can not only be useful for managing cash inflows and outflows, but can also offer security and protection. One key component of a business bank account is a debit card, which can be useful for making purchases and withdrawing cash or making deposits at ATMs.

One particular type of debit card is a warm card, or deposit-only card, which employees can only use to make deposits of cash or checks into business bank accounts at branch or ATM locations.

This activity is similar to writing “for deposit only” on a check, which means the funds on that check should only be deposited, not withdrawn. When something is marked “for deposit only,” it’s called a restrictive endorsement, which limits how financial instruments like checks and debit cards can be used.

  • Alternate name: Deposit-only cards

Here's an example of how warm cards work. Say you run a business with five employees. You open a business bank account that grants you a debit card you can use to make purchases or withdrawals. You also request a warm card for one of your employees, who's charged with making nightly deposits at the close of the business day. They can use that card to deposit cash or checks without requiring further approval or authorization from you.

Business bank accounts can also offer employee debit cards that allow for purchases or ATM withdrawals, so it's important to know which type of card you have.

How Warm Cards Work

Warm cards are designed to make managing deposits more convenient for business owners while offering some protection against fraud and/or financial abuse. A warm card, or deposit-only card, gives an employee the right to make deposits of funds at ATMs where they're accepted. So if a business has bank accounts at a particular bank or credit union, the card would allow the employee to deposit money at an ATM belonging to that financial institution.

For example, an employee may have 30 checks and $5,000 in cash to deposit. They would visit a branch that's authorized to accept warm-card deposits and fill out a deposit envelope if the ATM requires it. The employee would then insert the card into the ATM and follow the on-screen prompts.  They may need to enter a personal identification number (PIN). Once the deposit is made, they can remove the card and receive a receipt of the transaction.

As a different example, say you run a small business that has 20 employees. You're not always on hand to make deposits so you request five warm cards for five employees you trust to manage them. These employees can visit authorized ATM branches and use their cards to deposit cash or checks into your business banking account. These accounts are credited the same as any other deposit; the key difference is that you don't have to be there in person to make them yourself.

Banks can limit the number of checks or the amount of bills that can be deposited in a single warm-card transaction.

Benefits of Warm Cards

Deposit-only cards allow money to go into business accounts but not out. Employees can't use these cards to withdraw cash from business bank accounts, nor can they use them to make purchases online or in stores where debit cards are accepted. This is a measure of fraud control and it can give business owners some peace of mind by ensuring employees can't steal or misuse funds.

In addition, warm cards can simplify cash flow management and save business owners time. If employees are equipped to make deposits, that's one less task for the business owner to worry about, and they can redirect their time and attention to other business activities.

How To Get a Warm Card

To request a warm card, you typically have to be the owner of a business bank account or an authorized signer. You may be able to request one or more warm cards online through your mobile banking app or at a branch.

An employee's legal name, date of birth, and residential address may be required to request a warm card on their behalf.

The type of account you have and where you bank may determine whether warm cards are an option and how many you can request. If your bank offers warm cards for business accounts, you'd just need to specify how many cards you need. While your bank may not charge anything for these cards, it's a good idea to ask about any fees or surcharges that may apply.

Key Takeaways

  • Warm cards, or deposit-only cards, allow authorized employees to make deposits into business bank accounts.
  • Warm cards do not allow employees to make cash withdrawals or purchases, making them different from employee business debit cards.
  • Business owners can use warm cards as a security measure, since these cards limit the access employees have to business accounts.
  • If you have a business account, you can contact your bank to find out if adding warm cards for employees is an option.