Direct Deposit

Introduction to Direct Deposit

When your employer sends your pay directly to your checking or savings account rather than issuing you a paper check, you're participating in Direct Deposit. These deposits arrive and are made available to you more quickly than paper checks, and can be automatically divided among different accounts based on your direction. Direct Deposit is the most widely used electronic payment. In 2007, Direct Deposit increased by 6.2 percent to 5 billion payments. As many as 145 million Americans use Direct Deposit to receive their pay or government benefits. It's a simple, safe, smart, and green way to receive your money.

Did you know that switching from paper checks to Direct Deposit benefits the environment, too? Every year, paper checks use over 674 million gallons of fuel and add 3.6 million tons of CO2 to the environment. Imagine the collective difference we could make by using Direct Deposit.

Direct Deposit has been around for almost 40 years. It has a proven record of success - 97 percent of people who get paid via Direct Deposit are satisfied with it.

Direct Deposit is a simple, safe, and smart way to get paid. In addition to using Direct Deposit for payroll, many people also use it for:

  • Tax refunds
  • Social Security
  • Stock dividends
  • Company reimbursements
  • Bonus or commission payments

Benefits of Direct Deposit

The benefits of Direct Deposit are many and varied, but for starters, they include the following:

Direct Deposit is simple.

  • Once you have signed up for Direct Deposit, you don't have to go to the bank to deposit checks.
  • Your money is automatically deposited into your account on time, every time - and you don't have to be at work - or even in town!

Direct Deposit is safe.

  • Direct Deposit payments never get lost.
  • Direct Deposit is confidential. Money is transferred electronically and passes through fewer hands than a check.
  • Problems with Direct Deposit, which are rare, are quickly resolved.
  • Almost 85 percent of identity theft starts with someone seeing your personal financial information on a paper check, billing statement, or bank account statement. Once electronic payments are set up, the money travels electronically, greatly reducing the number of people who see your personal information.

Direct Deposit is smart.

  • Direct Deposit gives you access to your money earlier than check deposits. There is no waiting for checks to clear.
  • Direct Deposit puts you in charge of your money. Financial planners recommend Direct Deposit as one step towards gaining control of your finances.
  • With Direct Deposit, you decide how to divide your pay among your accounts and it will be done automatically.
  • Employers will issue a payment summary every deposit that will look much like your paycheck stub looks today. It will show your deductions for taxes, insurance, and other obligations, and will reflect the balance that was deposited into your account(s).
  • Your credit rating is one of your most valuable financial assets. About 35 percent of your FICO score is based on payment history, including detail on timely payments and late or missed payments. A late payment can stay on your report for up to seven years. Electronic payments ensure that you will never have another late or missed payment.
  • Direct Deposit is a smart way to help the environment. Each year, checks use more than 674 million gallons of fuel and add 3.6 million tons of CO2 to the environment as they travel through the payment cycle.

Source:   http://www.electronicpayments.org

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