The National Automated Clearing House Association reports that 82% of US workers receive their pay via direct deposit. And, it’s pretty easy to see why, as setting up a direct deposit is not only simple but beneficial to your financial health as well.
If you’re still receiving paper checks then your first order of business will be to either open a checking account, begin to bank with an online bank, or look into a prepaid debit card that will allow you to receive direct deposits without having to wait to cash a check.
Then, you’ll want to understand just how direct deposits can affect your finances. From quick, easy cash to the ability to waive monthly maintenance fees at your bank, here are some of the benefits of setting up direct deposit.
Reasons to Set Up Direct Deposit
You Receive Your Money Faster
If your employer pays you via a paper check then you have to wait for that check to clear before you’re able to withdraw the money. While this doesn’t take longer than a day or two on most occasions, that can affect a lot if you’re in need of the money immediately to pay bills or make rent. How long does a direct deposit take? It’s immediate. Once your employer’s payroll department releases the money it nearly immediately shows up in your account to use.
Direct Deposits Are Free
There’s no cost associated with setting up a direct deposit with your bank. Chase direct deposit and Bank of America direct deposit, for example, are both free if you have a checking account with each bank. You simply request the form and it comes pre-filled with your account information. All you have to do is download and print it to send off to your employer’s payroll department. As an added bonus, most banks will send you an alert via email or as a notification within their banking app to let you know that the money has been deposited into your account.
Direct Deposits Make Paying Bills Easier
Since direct deposits hit your account immediately, you’re more easily able to pay your bills on time or even schedule automatic bill payments. And, automated payments are one of the easiest ways to improve your financial health over time. If you have trouble remembering to pay bills on time, setting up automated bill pay will ensure they’re always paid on time, therefore reducing your risks of hurting your credit score. If you’re not receiving your payment via direct deposit, this is harder to do as you’re never quite sure when you’ll be able to put the money into your account.
You’ll Never Lose Your Money
Depending on how your employer pays its employees, physical checks can sometimes get lost in the mail. Likewise, if you receive a paper check in the office each month, you run the risk of misplacing it or losing it before you get a chance to get to the bank. It’s difficult to keep up with a paper check and if your life is pretty hectic, it’s easy to putt off heading to the ATM to deposit it. As well, it’s important to note that some places charge a check-cashing fee if you’re not able to deposit it with your bank. While it’s a small percentage, those few dollars add up over time in lost payment.
You Save on Monthly Bank Fees
Most banks charge monthly maintenance fees between $12 and $25. However, nearly every single bank will waive that maintenance fee if you meet a few requirements. One of the most common and widely used ways of waiving a bank’s monthly fee is to set up a qualifying direct deposit. To waive the fee for one of Bank of America’s most popular checking accounts, for example, you simply have to set up at least one qualifying direct deposit of $250 per month. That’s pretty easy to do for most people, and you’ll save $12 a month, or $144 per year.
Direct Deposit is Easy to Set Up!
There’s really no reason not to set up a direct deposit simply due to the fact that they’re so easy to set up. If you already have an open checking account, simply contact your bank and ask them for the direct deposit form. Most banks will fit it in for you with your banking information or you can choose to fill it in manually. All in all, it’ll only take about five minutes. And, once you set it up, you’re good to go unless you change banks or employers. It’s that easy.
Actually, you can get started setting up direct deposit easily with Cheese today. Keep reading to learn how!
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