Direct Deposit Facts
- It’s convenient. You don’t have to go to the bank to cash your check.
- It’s safe. No more lost, stolen, or misplaced checks.
- It’s reliable. Your money will be available the morning of the payment or sooner.
- It saves time. You have better things to do than stand in line at the bank.
- It’s popular. More than 93 percent of U.S. workers receive their pay by direct deposit, according to the 2019 “Getting Paid in America” survey.
- You can get paid even when you are out sick or out of town. Rest easy knowing that the auto-payments you have scheduled or the checks you’ve written will clear.
- It helps you manage your money. You can usually have your paycheck deposited directly into more than one account (such as a checking and a savings account). This can automatically help you set up a savings plan.
Frequently Asked Questions
Consumers: See this explanation from the Board of Governors of the Federal Reserve System for a broad overview of the requirements under Regulation E, which outlines the legal requirements for consumers, companies and banks that use direct deposit.
Employees: If you are interested in having direct deposit instituted at your company, contact your company’s payroll department about setting up a direct deposit program.
Payroll Professionals: Some helpful resources on setting up a Direct Deposit program include:
What is direct deposit?
What types of payments can be made by direct deposit?
- Salary payments from your employer
- Benefit checks from the federal government, such as Social Security, Supplemental Security Income, Civil Service, Railroad Retirement and Veterans payments
- Benefits issued by state governments, such as retirement and unemployment payments
- Pension payments
- Income from your investments, such as certificates of deposit, annuities and mutual funds
Can I use direct deposit if I don't have a bank account?
How do I begin using direct deposit?
How is money deposited into my account?
How can I be sure my deposit was made?
What if there is a discrepancy between my bank statement and the payment stub or deposit notice I received from the payer?
Will direct deposit cost me money?
Can I stop using direct deposit if I change my mind?
Can the payer take money out of my account or get confidential information about me through my bank?
Generally, no. Only you can approve the withdrawal of money from your account, and the payer only has access to the information you provided. However, if your employer pays you too much (e.g., if it sends two deposits to your account for one pay period), it can reverse the incorrect payment without notifying you within five business days of making the payment. Receiving your money by direct deposit is actually more confidential than being paid by check because fewer people are involved in the delivery and deposit of your payment.