Direct deposit creates an effective way of transferring money electronically. You won’t think about running to the bank every month to cash your checks. Direct deposits enable you to automatically process your paychecks and Social Security payments. Because of the electronic process, you will never worry about losing your paycheck, and the process is much faster than going to the bank for paper deposits. The following guide gives you a more detailed look at how to set up direct deposit.
Benefits of a Direct Deposit Account
- Direct deposit is a fast and convenient process: With direct deposit, you will have your money automatically deposited to your account without the hassles of going to the bank. You can also access the funds the same day they are deposited.
- Ensures safety: Direct deposit ensures that your money is transferred safely, without delay or getting lost.
- Has the overdraft protection feature: Some banks offering the direct deposit option have an automatic overdraft rewind feature, which reevaluates transactions made, reverses overdrafts and non-sufficient funds occurrences, and refunds the associated fees.
How to Set Up Direct Deposit
Whether you sign up through a financial institution or your employer, the process of setting up direct deposit is usually similar. To begin, here are the five key steps to follow to benefit from direct deposit.
1. Obtain a direct deposit authorization form
To start the process, ask for a printed or an online direct deposit authorization form either from your financial partner or employer. The authorization form is a document that permits a third party to transfer money to your bank account.
An important question that people ask is, how do I get a direct deposit form? Getting a direct deposit to your bank is usually an easy and fast process. Most banks offer a link on their website that says “Set up Direct Deposit” where you are able to create a customized direct deposit form. By clicking on the pre-filled form, you will add the needed information electronically and save it to start the deposit process.
Alternatively, you can download the blank form in PDF and fill the needed details yourself. The forms usually have instructions that show where you can find the information you will need to fill in the direct deposit form.
When filling out the form, some of the things to keep in mind include reading through the form completely and ensuring that the checklist items are followed, keeping the information confidential and submitting the form directly to the employer, and following up with the payroll department to check the progress of the deposit.
2. Fill in your account details
For your payments to be authorized, the bank account information you provide must be validated for security purposes. You are required to provide direct deposit information, including details about your bank account. Some of the key information needed when setting up a direct deposit include:
- The mailing address of the bank: This can be found on your bank statement or the bank’s website.
- Routing number: You must provide the routing number of your bank when setting up a direct deposit. This is the nine-digit number that is located at the bottom of your bank statement and also online.
- Your account number: The account number is usually located below the routing number. You may also find it on your bank statement, deposit slip, or a paper check if you have them.
- The account type: Another important bit of direct deposit information you need to provide is where you wish to channel the direct deposit whether it should go to your savings or checking account.
- Your Social Security number: Some authorization forms require you to include your Social Security number.
- Your address: You may also need information about your address and email address.
3. Confirm the amount of deposit
Confirm whether you will want to deposit the entire paycheck into one account or spread the amount to different accounts. Most recipients of direct deposit put the full amount of their paychecks into their checking accounts, but you have the option of dividing the money to separate accounts. Some financial institutions may even allow their customers to direct deposit into more than two accounts. This decision should be influenced by your budgeting decisions, including how much you plan to spend, save, or invest.
4. Attach a deposit slip or voided check
You may need a deposit slip or a voided check to verify your routing number or account number. Alternatively, you may need to scan your check and send the copy online. Make sure you write “Void” across the blank check so that no one can withdraw money from your account with this check. This information should be attached to the direct deposit authorization form.
5. Submit the direct deposit form
Once you have filled the form, give it to your employer and wait for the direct deposit to take effect. This may take a few days or weeks depending on your bank account and payroll department. In some cases, the direct deposit will take effect after two pay cycles. When the deposit is ready, you can make automatic transfers.
How Can I Direct Deposit Myself?
Most people wonder if there is a way they can trigger a direct deposit, particularly for the purpose of earning promotions and bank bonuses. This is possible through the following alternatives:
- ACH transfers: Most banks have automated clearinghouse (ACH) transfers, a free way to transfer cash from one financial institution to another. ACH is a quick process to get a direct deposit from someone’s existing bank account to a new one.
- Person-to-person payments: This process involves sending money to other accounts online. Once you set up an account with your bank’s system, you can easily make a direct payment between two accounts.
ACH payments are handled electronically. Most customers prefer using this payment method to pay bills because their checks can never be stolen or get lost. They also do not need to make any trip to an ATM or go to a bank branch. The deposit option also eliminates check or postage costs, making it a cheap direct deposit option.
Some people, however, are not informed about how to send an ACH payment. To set up the payment into a new checking account, all you need to do is link the new account with your current bank details. Depending on your bank, you might be able to add the new account to your current account through the bank’s website.
Once you request a direct transfer using the ACH system, your bank will try to make small deposits to verify if the new account is valid. Once this is proven, you should be able to transfer money to the new account. In most cases, ACH transfers take a few business days to complete a transaction. However, in cases of large deposits, you might have to wait a little longer.
Overall, whether you download your direct deposit form from a payroll software or through your bank, creating a direct deposit remains the simplest and safest way to get your paycheck. You can authorize your direct deposit today through ACH transfer, thanks to Checkissuing.com. Create your direct deposit account with us today, and we will ensure that your transaction is smooth and running in minutes.