An advice of deposit is a formal notice your bank generates and sends to you confirming that funds from a third party have been credited to your account. You don’t fill it out and hand it to a teller; the receiving bank produces it internally once the credit posts, then delivers it to you electronically or on paper. Businesses use these notices to verify incoming wires, reconcile invoices, and document high-value transactions for accounting and audit purposes.
The document is sometimes called an “advice of credit.” In international banking, the same concept moves through the SWIFT network as an MT910 message, formally titled “Confirmation of Credit,” sent by the account-servicing institution to the account owner.1SWIFT. Category 9 – Message Reference Guide In domestic U.S. wire transfers through Fedwire, the Federal Reserve defines an “Advice of Credit” as a message advising a participant of a credit to its account.2Federal Reserve Financial Services. Operating Circular No. 6 – Funds Transfers Through the Fedwire Funds Service
Advice of Deposit vs. Deposit Slip
The two documents point in opposite directions. A deposit slip records money you handed to your bank. An advice of deposit records money someone else sent that has now arrived in your account through the banking system. If you deposit a check at the counter, you get a slip. If a customer wires payment to you, you get an advice of deposit.
What the Notice Contains
Every element on the notice exists so you can match the incoming money to the transaction you were expecting.
- The exact credit amount posted to your account, which you cross-reference against the invoice, contract, or expected payment.
- The date and time of posting, which matters for interest accrual and for meeting deadlines tied to when funds arrive.
- Beneficiary details: your name and account number, confirming the money reached the right place.
- Originator information: the sending bank’s name and, where available, the party who initiated the transfer.
- A reference number tying the notice to the bank’s internal records. Quote this number if you ever need to trace or dispute the transaction.
- Payment method codes. For international wires, this may reference a SWIFT MT910. For domestic Fedwire transfers, it links back to the Advice of Credit message the receiving institution got from the Federal Reserve.
Reconciliation errors most often show up in the amount field. Currency conversion and intermediary bank charges can reduce the credited sum below what the sender originally transferred, so the figure on the notice may not match the invoice on the nose.
When You Actually Need One
For a paycheck landing by direct deposit, the app notification is enough. Advice of deposit documents matter when the stakes and accounting requirements rise.
International Trade
Cross-border payments frequently pass through multiple intermediary banks before reaching the final beneficiary. A payment routed through SWIFT from a buyer in Germany to a supplier in the United States might touch two or three institutions along the way. The advice of deposit is the beneficiary’s confirmation that the funds made it through that chain, letting the treasury team update cash positions and release internal holds that were waiting on proof the money arrived.
Large Corporate Transactions
A company receiving a multi-million-dollar loan disbursement, a capital injection from investors, or a major contract payment needs more than a screen notification. The advice of deposit is the source document the treasury department uses to update the balance sheet, confirm covenant compliance, and begin allocating capital. Auditors expect that external verification behind the accounting entry.
Intercompany Transfers
When a parent company moves cash to a subsidiary, or subsidiaries transfer funds among themselves, both sides need documentation proving the amount, timing, and direction. The advice of deposit supports consolidated financial statements and transfer pricing documentation. The IRS expects taxpayers in related-party transactions to keep contemporaneous records backing the arm’s-length nature of those transfers, and bank-generated deposit confirmations are part of that paper trail.
Real Estate Closings and Escrow Funding
In high-value property transactions, the escrow agent or title company often needs to verify that the buyer’s earnest money or closing funds have actually been deposited. A copy of a check only proves a check was written. The advice of deposit from the escrow agent’s bank proves the funds arrived and posted. Procedures for confirming escrow deposits vary by state and by the purchase contract.
Your Bank’s Obligation to Send It
Banks don’t send these notices as a courtesy. Under UCC Article 4A, which governs funds transfers across every U.S. state, the beneficiary’s bank must notify you when it accepts a payment order crediting your account. Notification has to happen before midnight of the next funds-transfer business day after the payment date. If the bank fails to notify you, it owes you interest on the payment amount from the day notice should have been given until you actually learn about the deposit, plus reasonable attorney’s fees if you have to sue for that interest.3Cornell Law Institute. UCC Article 4A – Funds Transfer
For recurring electronic fund transfers like preauthorized ACH credits, federal Regulation E adds a second layer. When someone initiates recurring transfers into a consumer’s account at least once every 60 days, the account-holding institution must provide positive notice within two business days after each transfer, negative notice if a scheduled transfer didn’t happen, or a readily available telephone line the consumer can call to check.4eCFR. 12 CFR Part 1005 – Electronic Fund Transfers (Regulation E)
Reconciling and Retaining the Notice
When an advice of deposit arrives, match it first. The amount and sender’s reference should line up with an outstanding invoice, contract milestone, or expected payment. Watch for shortfalls caused by conversion fees or intermediary charges. Once verified, record the deposit in your accounting or ERP system, mark the corresponding receivable as paid, close the open invoice, and file the notice as the source document supporting the ledger entry.
Retention depends on your situation. The IRS general rule for business records is three years from the date you filed the return the record supports. The period extends to six years if you underreported income by more than 25% of gross income, and to seven years if you claim a loss from worthless securities or a bad debt deduction. Employment tax records require at least four years. Many businesses default to a seven-year retention policy as a conservative blanket, but the actual IRS floor for most standard income and expense records is three years. Insurers, lenders, and external auditors may set longer requirements of their own.5Internal Revenue Service. How Long Should I Keep Records