Direct Deposit is the electronic transfer of a payment from a company or organization into an individual's checking or savings account.
Direct Deposit is ideal for more than just payroll and can be used for expense reimbursements, tax refunds, pensions, dividends and bonuses.
Most large companies (500+ employees) offer Direct Deposit, and it has become a staple in today's employee benefit packages.
Businesses of any size can offer Direct Deposit. Businesses of less than 100 employees still can save more than $5,000 per year by offering Direct Deposit to their employees (Tinucci 2003). Many payroll software packages, as well as independent processors, provide a Direct Deposit feature.
Employees who use Direct Deposit can access their pay in their accounts at their financial institution's opening of business on payday - there is no waiting for checks to clear.
For income tax refunds, the government often makes refunds via Direct Deposit within days of receiving returns.
Problems with Direct Deposit are very rare. The chance of having a problem with a check is much greater than with Direct Deposit. Many more people see a check increasing the chances of check fraud or identity theft.
Ninety-seven percent (97%) of those who use Direct Deposit are very satisfied with it.
Three out of four employees who have Direct Deposit available use it.
In 2005, 68 million taxpayers e-filed their taxes and more than 52 million received their refunds by Direct Deposit.
Businesses can save anywhere from $0.50 to $1.25 per payment by using Direct Deposit instead of checks.
Many financial institutions offer free checking or other account benefits to consumers who use Direct Deposit.
Direct Deposit uses the same levels of security that companies and the government use to transfer funds to each other - your money is safer with Direct Deposit.
With Direct Deposit your pay is generally available in your bank account on the morning of payday.
Tax refunds are also received more quickly - generally in two to three weeks after your return is filed, rather than months later.
"Use Direct Deposit and (Direct) Payment. The less you handle your money, the less you'll waste. Have your pay put directly into your checking account. Then set up monthly deductions to move cash to mutual fund or brokerage accounts for automatic investments."
