Direct deposit can be a great tool. Your employer may offer direct deposit or they may require that you have it. Direct deposit is when they deposit your paycheck into your account for you. Often a direct deposit will show in your account the morning of your payday. Additionally banks may offer discounts on banking fees if you have a direct deposit into your checking account. To sign up for direct deposit you must contact your human resources office for the forms to sign up for direct deposit.
Direct deposit is a great convenience feature, but it can also be an effective tool. You can usually divide your direct deposit into two separate accounts. This means that you can set a certain amount to go into savings each payday. This is a great way to automate your savings goals. Additionally if you increase this amount when you get a raise or when you start a new job, you will not miss the money. Since you are not doing it yourself, it is easier to stop thinking about that money being available to you to use.
If you close an account and you have direct deposit, you will need to give about a thirty day notice to your employer so that they can process everything for you to receive direct deposit to your new checking account. A good practice is to leave your old account open until your direct deposit shows up correctly in your new account. Some employers process the changes very quickly, but others take a great deal of time.
Direct deposit is a great feature, but if you have a problem with the overdraft cycle, you may want to stop having your paycheck deposited until you can fix the problem. If your employer doesn’t offer this option, it can be very difficult to fix the situation. You may need to talk to the bank and see if they are willing to work with you while you get caught up.
