Man filling out his direct deposit form

How Does Direct Deposit Work?

Almost all workplaces give employees the option to enroll in direct deposit. Some employers don’t even issue traditional paper paychecks anymore! Setting up direct deposit takes the pain out of payday. You don’t need to worry about rushing to the bank so you can deposit your check. Another perk of direct deposit paychecks: the moment the clock strikes midnight on payday, your money hits the bank account. Are you convinced yet? Here is everything you need to know about direct deposit.

What exactly does “direct deposit” mean, anyway?

Direct Deposit is an electronic method of collecting your paycheck. The money is sent directly to a bank account of your choosing at no additional fee. You can also receive your income tax refund via direct deposit. This is a popular choice for those who rely on debit cards more than cash.

How do I start receiving direct deposit paychecks?

Setting up direct deposit is an easy process. Here’s how to get started:

  1. Ask your employer for the appropriate form.
    You may be able to download the paperwork, or fill it out entirely online. It all depends on where you work.
  2. Enter the correct account number and routing number of the account you want to use.
    You can find this on the bottom of your check; if you didn’t order checks, you can access this information on your bank’s website. This information remains strictly confidential.
  3. Voila!
    All you need is a little patience. It takes one to two payroll cycles for you to start receiving your paychecks directly. Until then, you’ll get paper checks.?

How do I know I’m getting my money?

You’ll still receive a paystub for your paycheck; it just won’t be attached to a paper check. The paystub may be sent to your email, you may pick it up at work, or it may be mailed to your home—it all depends on your workplace’s practices. Be sure to report any discrepancies between what’s been directly deposited and the amount listed on the stub, just like you would do with a traditional paycheck.

I can cash my paycheck at my workplace. Why do I need direct deposit?

Being able to cash your paycheck at work is super convenient; I loved that about my old retail job. However, sometimes life gets in the way between you and that money. If your paychecks are shipped from an out-of-state main office, you could suffer delays due to inclement weather. That happened to me and my coworkers when blizzards in Massachusetts delayed our paychecks for nearly a week…unless they had direct deposit set up.

Choosing to have your paychecks deposited directly is a smart choice. Say goodbye to paycheck delays and waiting for traditionally deposited funds to become available. Start receiving your paycheck exactly when you need it!

Last Updated: May 14, 2015