If your employer offers direct deposit (and most do these days) there are several advantages to using it. In fact, direct deposit is not only beneficial to you, the employee, but also to your employer because it saves them time and resources printing and distributing paper checks.
Here are three reasons why you may want to use direct deposit:
1.) Saves You Time
With direct deposit, your money is automatically deposited into your checking account. You don’t have to find time to drive to the bank and stand in line waiting to cash your check. The days of hurrying to the bank before it closes are over. Your money will already be in your account, available to you, on the day you get paid. In addition, you can save money on gas by not having to make the extra trip to the bank. If you have a business, you can outsource payroll responsibilities so they can take care of all direct deposit issues.
2.) Helps You Save Money
With direct deposit, you can have some money go to your checking account to pay your monthly expenses, and you can have some funneled directly to your savings account, retirement account, and/or investment account. This turns out to be a great way to save because after a while, you “forget” that this money is being withdrawn.
When I held a conventional job previously, I had $150 pulled out of my check every two weeks to build an emergency fund. Sure, the first few weeks I noticed the check was less than it normally would be, but after two months, I didn’t even notice the money not being in my checking account. Meanwhile, my savings grew, and I didn’t have to be diligent about my savings; it just went there automatically with no effort on my part. This is a great strategy to use to grow your emergency fund or invest in your retirement account, particularly if you lack discipline or like to spend money as soon as you get it.
3.) No Delay In Getting Your Money
If you are on vacation, you don’t have to wait until you are back to get your paycheck. Instead, the money will be waiting for you on payday. Likewise, if you are sick or payday falls on a holiday, you don’t have to wait to get your money. In fact, when pay day falls on a holiday, you will usually get your deposit the day before the holiday.
If you would like to have your check automatically deposited in your bank account, simply go to your payroll office. You will have to fill out a brief form that asks for your bank account number as well as the routing number. You will also need to attach a copy of a voided check. Specify what accounts you want to use and how much money you want put in each account, and you should be able to have the convenience of direct deposit within a few weeks.
In addition to paychecks, don’t forget to have your income tax return automatically deposited in your bank account. Using direct deposit, you can get your tax return several weeks earlier than you would if you waited for the IRS to mail you a paper check.