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What time does direct deposit go through?
Direct deposit typically goes through before 9 a.m. on the day you're scheduled to be paid, unless the payday happens to fall on the weekend or on one of the 11 federal holidays recognized by the United States Government.
Depending on the source of the payment and your financial institution, a direct deposit payment could hit your account as early as midnight.
If your direct deposit is a paycheck from your employer, the direct deposit time can depend on how your employer sets it up. Typically, a direct deposit would go through on the business day before or after your payday.
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What is direct deposit?
Direct deposit is a way to electronically receive payments owed to you by having the money directly deposited into your checking or savings account. Funds that can be directly deposited into your bank account include payroll, Social Security benefits, child support, and tax refunds.
When does direct deposit hit?
Funds that are directly deposited into a bank account typically go through before 9 a.m. but can arrive as early as midnight. The variability in the amount of time it can take is largely due to the payer’s timeframe to release funds. All banks have a process for receiving and disbursing direct deposit funds to the account holder.
The main benefit of a direct deposit is that you get paid sooner. Funds are available in your account immediately (unlike with depositing a traditional check which requires time for the funds to clear).
How does direct deposit work?
All funds that are directly deposited from a payer into an individual’s bank account are electronically transferred following this general process:
Employer sends payroll information to its bank. Your employer will ask you to complete a direct deposit authorization form with your name, social security number, and your bank account information.
Automated Clearing House (ACH) network processes payroll information. This is the primary system used throughout the United States for electronic funds transfer (EFT). With ACH, funds are electronically deposited in financial institutions and payments can be made online.
Your bank receives payment. Your bank will receive the funds from the ACH network.
Payment hits your account. Based on the time that the funds reach your bank, the money will be deposited into your account.
How long does direct deposit take to set up?
Setting up direct deposit is easy and could take a couple of day to a few weeks, depending on whether or not you sign-up online or need to physically provide an employer or agency with your banking information.
Once your forms are submitted and the account links are set up there’s no need to do anything else. Most employers offer a direct deposit service, as do government agencies including the IRS and Social Security.
Is direct deposit worth it?
Yes. Having payments directly deposited into your accounts saves time driving to a credit union or bank, saves gas, provides you with faster access to your money, and eliminates the risk of misplacing your checks along the way.
Pros
Saves money. You save money on gasoline and the payer saves money on check printing and mailing costs.
Faster transactions. Your money is automatically deposited, saving you a trip to the bank.
Get paid sooner. Funds are available in your account immediately (unlike with depositing a traditional check meaning the funds need time to clear).
Safer than receiving a paper check. Paper checks can get misplaced in your home, lost in the mail, or lost on your way to the bank.
Cons
Security risks. All electronic financial transactions these days have some level of cyber security risk, which all financial institutions take measures to prevent.
More paperwork when changing banks. If you change to a different credit union or bank, you’ll need to give the payer instructions to stop your direct deposit. If you want to continue direct depositing at a new financial institution, you’ll need to submit a new application form with your new account and routing number.
Does direct deposit go through on the weekends?
Direct deposit does not go through on weekends. If your payment comes from an employer, the company will decide whether to release the money on the business day prior to the weekend or after (Friday vs. Monday).
What is early direct deposit?
Early direct deposit, also called early pay, is a free service provided by some financial institutions as a courtesy to their customers. Qualifying deposits are released as soon as the funds are received by the recipient’s bank. With early pay you may get paid up to two days before your scheduled payment date.
How do I set up direct deposit?
Direct deposit setup is easy! To get started you’ll need your personal and banking information.
Fill out the direct deposit form. The payer will ask you to complete a direct deposit form either on paper or online. Be prepared to provide your name, address, and Social Security number.
Include your bank information. You will need to provide your bank account number and the financial institution’s routing number.
Deposit amount. The amount you choose to direct deposit depends on the amount you’re receiving and the frequency of the payment. One-time payments (such as a tax refund from the U.S. government) are typically deposited entirely into one account. Some people split the earnings from their employment into different accounts, such as checking and savings, so that some of the money is directly deposited into each account or into a 401(k) retirement account.
Provide voided check or deposit slip. For added confidence in the direct deposit setup you may be asked to provide a voided check from your checking account into which the money will be deposited, or a deposit slip showing your credit union or bank account routing number.
Submit the form. Credit unions and banks provide consumers with in-person and online form submission options, but providing the form in person provides added security and assurance
FAQs
Why hasn't my direct deposit gone through?
As we mentioned earlier in this article, if your payday falls on a weekend or Federal Holiday, your payment could be delayed. Other reasons for a delay could be related to the electronic transfer system by either the payer or your bank. A tax return payment is somewhat unpredictable and is based on the processing time of your file.
If your regularly scheduled direct deposit payment is more than a few days late contact your bank and the payer to let them know you haven’t received your payment.
Can you use direct deposit without a bank account?
If you cannot open a checking account due to bad credit or other factors, you may purchase a prepaid debit card and have funds deposited onto the card. You can buy a prepaid card online or in person at a retail store.
According to the Consumer Financial Protection Bureau, if you want to use direct deposit to reload your card, make sure this is an available feature on the card you have or plan to buy. Many cards do not charge for adding money through direct deposit, so it might be a cheaper way to add money to your card than other options.
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
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