Direct Deposit is an important employee benefit. It can be an excellent financial planning tool because it allows people to divide their pay into as many different accounts as they wish.
Nearly 65 percent of workers receive one or more payment via Direct Deposit. Research conducted by the Federal Reserve in 1998 found that 97 percent of consumers using Direct Deposit are very satisfied.
Why Should I use Direct Deposit?
When your paycheck or benefits are automatically deposited into your account, you’ll make fewer trips to the bank plus, using direct deposit is more secure than sending a check through the mail.
Direct deposit is an electronic transfer from your employer’s bank account to yours, so your wages go straight from your employer to your bank account. Because direct deposit eliminates paper checks.
There’s no need to worry about your paycheck getting lost in the mail or stolen. Direct deposit can be used for your payroll checks, Social Security payments, tax refunds and other government checks.
How to set up Payroll Direct Deposit with Your Employer
- Ask for a copy of your employer’s direct deposit signup form, or download the U.S. Bank Direct Deposit Authorization Form (PDF).
- Provide your deposit account type (checking or savings), account number, U.S. Bank ABA Check routing number and other required information.
- Submit the completed direct deposit form to your employer.
Direct Deposit for Business
Enroll your employees with a simple form, and you start saving time and money for your payroll and other types of payments to your employees. Funds transfer electronically directly between accounts to eliminate manual check preparation.
Your Direct Deposit transactions are safe and secure, and unlike a paper check which passes through many hands, your account number remains confidential to your financial institution or payroll provider. Electronic payments reduce the use of paper and its impact on the environment.
What to Expect from Our Government
When your employer or government agency establishes direct deposit for you, they run a test to make sure the account numbers are correct. It usually takes a couple of pay cycles for the direct deposit to start, so continue to look out for your paper checks until you get confirmation from either your employer or government agency.
Remember When Filling out and Submitting a Direct Deposit
- Read the direct deposit form completely and be sure to follow the checklist items
- Keep the information secure while filling out the form and submit it directly to your employer
- It can take several payroll cycles for changes to take effect
- Follow up with your Human Resources department to check on the progress of your request
How to Give Direct Deposit Instructions
Typically the organization that is paying you will have direct deposit instructions. Ask for a “direct deposit form”. Banks (or whatever institution is receiving the payments) often have some type of direct deposit brochure as well. This brochure will give you the information that you need to give to the payor.
Details of Direct Deposit Instructions
To set up direct deposit, you will need your receiving firm’s (your bank most likely) ABA Number. An ABA number or Routing number will identify your bank uniquely within the direct deposit system.
If you think of a phone number as the number that lets you call somebody, an ABA number is a number that lets you send somebody money via direct deposit. Just call your bank and ask what their ABA number is — they will know what you are talking about.