Direct Deposit for Individuals : How Direct Deposit Works

Introduction | Benefits | How It Works | Fast Facts | FAQ

1. Sign Up

Sign up for Direct Deposit. Complete an enrollment form to authorize a company to make a Direct Deposit into one or more of your accounts. Authorization forms may vary slightly from company to company, but the required information is the same.

Promo for Interactive Demo (Defaults to Direct Deposit)

2. Test

The company making the Direct Deposit may perform a test run with no dollar amount to make sure the account numbers have been recorded correctly.

3. Process

The company processes the payment by Direct Deposit - in banking terms, this is known as an ACH transaction.

4. Post

Your financial institution credits your account and the transaction is reported on your monthly account statement.

5. Confirm and Verify

The company will provide a paper or electronic confirmation of the Direct Deposit. This will confirm the date of the deposit and will include deductions and the net payment amount. If you want further information or a confirmation of your deposit from your financial institution, you may call them or go online, as you would for any banking transaction.

Most large companies in the United States are using Direct Deposit for their payroll. Both employee demand and factors like convenience and cost savings are driving an increase in use.

Direct Deposit also can be used for expense and travel reimbursement, pension and annuity payments, interest payments and retirement and mutual fund distributions.

"A nice feature is that you have to sign up only once. After that, everything runs on autopilot, although you certainly can correct errors, cancel it, or switch accounts. Another benefit is faster access to your money. With Direct Deposit, your pay will typically be in your bank account on the morning of payday."

- Russ Wiles,
The Arizona Republic (Phoenix)