A direct deposit is a fund that is electronically deposited to your bank account rather than through a paper check. The most common use for a direct deposit is for income tax refunds or paychecks. Direct deposits are a popular way of making payments because they remove the risks involving loss of checks or the need to visit the financial institution physically to make a deposit. Direct deposit ensures that an employee’s pay is made available in their accounts almost immediately, even at midnight before the payday in some cases. Another benefit is that the deposit made does not have to undergo a check-clearing wait period.
It can be used as an excellent financial planning tool since it allows people to receive their payments in different accounts as they wish. By doing so, saving and investing add up. Many workers receive their payments via direct deposit and most consumers are found to be satisfied with direct deposits.
In addition, direct deposit helps the government, companies, and even individuals to save a lot of money. For patrons, the direct and indirect cost of depositing a check is usually more than using direct deposit once you factor in time, postage, and driving to the bank or credit union.
Consumers can benefit from direct deposit immensely as it is secure, convenient, and fast. You can’t lose a direct deposit payment, and it also allows people to access their money with ease at any time vs. a traditional check. Other than getting paid, direct deposit also helps a person in expense reimbursement, travel advances, and any other forms of payment.
Direct deposit can help you save if you have a part of your direct deposit sent to a savings account instead of your checking account. This makes it instinctive to automatically make a tax payment or put money into a fund for your retirement. You might not even miss the money, since it disappears before you can even comprehend it.
The trick to automating your savings is to divide your direct deposit into different accounts. There are several direct deposit programs that will allow you to split your deposit in four ways. This will allow you to automate your savings and help you to spend only the specific amount you want on each account. For instance, you can set up a direct deposit that pays a certain amount to your savings, a certain amount to an account to pay your debts, and the rest of the payment to your checking account for your day-to-day expenses. You can split the direct deposit according to your needs. If your employer doesn’t allow you to split your deposit, Peach State can help you set this up for your account(s).
Making use of a dedicated direct deposit can help you build up your savings. You can easily direct your salary to your high-yielding savings account each time you are paid. The savings will gradually accumulate.