Benefits of Direct Deposit

Using direct deposit can improve your financial situation, not to mention your life.  Direct deposit is when you give your employer instructions on how to transfer your paycheck directly into your bank account each payday.  With direct deposit, funds are normally transferred first thing on your payday – you may have funds in your account before you even get out of bed!

Having money in your account as soon as possible can help you stay current with bills and prevent costly overdrafts.  Depending on the account, you may even earn a few cents worth of interest payments.  Lastly, direct deposit is convenient; with it you will no longer have to worry about getting to your bank to make an in-person deposit.  And that spells more time to do other things.

Check with your employer to set up direct deposit if you think it may be right for you.

Direct Deposit and Payroll Cards

While people with bank accounts are able to sign up for direct deposit easily, people without bank accounts who have jobs that only offer direct deposit may have to get their wages on a payroll card.  These cards are also called pre-paid debit cards.  Pre-paid debit cards can be used to pay bills and make purchases, saving people without bank accounts from using expensive check cashing and bill payment services.  However, they are relatively new products and often come with a host of fees that most consumers are not aware of until they are charged.

Read the checklist on “Fees to watch out for with payroll cards/prepaid debit cards” to see if payroll cards/prepaid debit cards are right for you.