Cash in Transit (CIT) refers to the movement of physical cash or funds from one location to another, including deposits and wire transfers. It can also involve security companies transporting cash from one location to another. Deposits and transfers must be received by a certain time to be posted on the same business day.
Cash in Transit (CIT) is a term used to describe situations where actual cash is in the process of moving from one state to another. Like cash in transit (CVIT) valuables, cash in transit can involve physical cash being moved from one location to another, such as cash being withdrawn from a bank vault and delivered to a business customer in an armored car. Most often today, the term is used to describe the status of money transfers or deposits as funds are transferred from one account to another.
One of the most common examples of cash in transit has to do with how deposits are recorded and made available to account holders. Many banks require deposits to be received by a certain time of day in order for them to register as received that same day. This means that if banking rules and regulations state that only deposits received in hand before 2:00 pm are posted on the same business day, a deposit that is delivered at 3:00 pm will not be posted and will be put to use. available to the account holder until the next business day. In fact, the deposit will appear on the account statement as a deposit for the next business day instead of the actual date of the deposit.
This same general approach applies to wire transfers as well. If the account holder receives payment from an employer via direct deposit, the funds are credited immediately and are available if the transfer is received by a certain time of day. If the transfer is received after that deadline, it posts but is not posted to the account and is ready for use until the next business day. During this period of time when the deposit has been received but remains unposted to the account, it is said to be cash in transit.
The term still applies to actual physical cash assets that are moved from one place to another. Security companies are often in the business of managing these legal tender physical relocations, such as making deliveries from a treasury location to a bank or transporting cash from one branch of a given bank to another branch located in another part of town. Here, cash in transit applies not only to the state of the cash as it moves from one location to another, but also to how quickly the funds are received and recorded in the recipient’s bank records.
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