The Advantages of Direct Deposit
More than 93% of U.S. workers were paid via direct deposit in 2019, according to a “Getting Paid In America” survey. Direct Deposit is offered in virtually all workplaces since it’s a safe and easy way for employers to pay their employees. For those who have yet to enroll, here are the benefits of direct deposit and why you should sign up for this free service!
What is Direct Deposit?
A direct deposit is an Automated Clearing House (ACH) transaction, where your payment is electronically transferred to your chosen bank account. This payment could be your paycheck, pension, social security payment, or even travel reimbursement. Almost all employers now offer the ability to enroll in direct deposit in lieu of taking a paper check. There are several benefits to enrolling in direct deposit.
1. You don’t have to worry about losing a paper check before getting to the bank.
Long gone are the days when your paycheck was misplaced or lost in a pile of paperwork. If you tend to misplace important documents, you can’t misplace a direct deposit! Plus, employers will still provide you with a pay stub to review your paycheck details, so you can keep track of what’s being taken out of your paycheck.
2. You don’t have to wait in line at your financial institution to deposit a paper check.
Skip the long lines and stress, you can simply log on to your mobile banking app or online banking to see the direct deposit has been posted to your account. This is also when you should take at least a minute to look over your bank account to check your money was deposited correctly and check for any mistakes or suspicious activity.
3. You have access to the funds right away on payday.
You don’t have to wait until you physically pick up and deposit your paycheck to see your paycheck in your account.
4. You still receive your paycheck if you aren’t in the office.
You don’t have to worry about being at work to receive your pay. You will still receive your direct deposit if you’re sick, on vacation, or even on a holiday!
5. You’re helping the environment.
Paper paychecks use more than 674 gallons of fuel per year! Direct deposit has a much greener footprint.
6. Direct deposit is a more secure form of payment.
Less people view your account information than when a paycheck is passed around. It’s a safe and confidential way to receive payment.
7. It’s easier to budget and save money with direct deposit.
You can set up automatic savings so that a portion of your paycheck goes into a savings account each time versus putting all of the funds into your checking account. This allows you to pay yourself first, a popular savings strategy recommended by experts.