Direct deposit has become an increasingly popular way to manage money. There are many benefits to utilizing the option of direct deposit, mostly due to the convenience factors associated with this method of managing monies.
Bank account holders sign up to direct deposit to receive many kinds of payments. Agencies that offer direct deposit include employers, child support and government dispersals such as Social Security and tax refunds to name a few.
Here are a few reasons to sign up for direct deposit with an employer or agency:
• Fast access to cash
Traditionally when a person deposits or cashes a check there is either a hold until the check clears, or some banks require you to have enough funds in your bank account to cover the amount of the check until it clears. Signing up regular payments for direct deposit means there is immediate clearance of the check as soon as the bank receives the money from the payer, which means your funds can be used without delay.
When monies are sent directly to the bank electronically, this reduces the risk of theft or loss in delivery. Checks generally go through several channels before the document reaches its recipient, and by eliminating the ‘middle man’, this raises the safety factor of money being delivered to your account without any potential mishap.
• Avoid bounced checks
Scheduled and regular payments through direct deposit mean no more worries about timing your own written checks. Once you receive notification your direct deposit has arrived, you can send those checks out immediately rather than have to wait for a paper check to clear before you can make payments.
• Saves time
Direct deposit is a time saver because you do not have to go to the bank during their hours of operation. No more traveling to the bank and waiting on lines to deposit or cash your check.
Your financial transactions do not have to take a hiatus when you are on vacation, ill, car in the shop, or other reason for being unable to get to the bank. Through direct deposit you can relax knowing that your money is scheduled to come through on a timely basis. However, as a word of caution, before drawing on an account, you should always double check and make sure the deposit has arrived as sometimes delays may happen.
Direct deposit is very convenient and its best advantages are perhaps the convenience and speed factors. When people get paid it is helpful to be able to access money and use it immediately since electronic transmissions are rapid. This option has been in effect for a long time, and today has become a routine way of doing banking.