Direct Deposit How it Works For Financial Institutions
Sign Up: After completing the necessary financial and risk review with your business client, it’s easy for the client to enroll employees in Direct Deposit. Encourage your client to offer split deposit as an additional benefit that enables employees to save automatically.
Suggest that your client request a voided check or a copy of a document from the employee’s bank or credit union that verifies the employee’s account number and the institution’s routing transit number to ensure that the Direct Deposit is set up accurately.
Encourage your client to use Direct Deposit for bonuses, commissions, and employee expense reimbursement, as well as retirement, annuity, interest, and other recurring disbursements.Download sample forms »
Set Up: Talk to your business client about pre-notifications as a way to test data entered in the enrollment process, so any errors you are made aware of can be corrected before initiating live Direct Deposit transactions.
Process: One or two days before the scheduled date, customers initiate live transactions by sending you an ACH file. On or before the settlement date, depending on the business customer’s risk profile, debit your business customer’s account for the total amount of the Direct Deposit via ACH transactions, and record the transactions on its account statements. Talk to your client about electronic or paper-based options for reporting gross, deduction, and net amount details.
What is Direct Deposit via ACH?Direct Deposit via ACH is the deposit of funds for payroll, employee expense reimbursement, government benefits, tax and other refunds, and annuities and interest payments. It includes any ACH credit payment from a business or government to a consumer.
Is Direct Deposit via ACH for everyone?Direct Deposit via ACH is an important benefit for businesses and government to offer and a convenience for individuals to use.
How many people use Direct Deposit via ACH?Three out of four working Americans who have Direct Deposit available for their pay use it, and usage continues to grow. Most large and medium-sized businesses, and a growing number of small businesses offer Direct Deposit as a benefit to their employees.
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