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There are several great reasons to utilize direct deposit if your company offers this feature. The first and foremost reason is banking fees. Many banks charge account fees to maintain a savings or checking account in their institution. If you have direct deposit they will waive these fees because they are saving money on the transaction. Processing checks takes time and money and the bank passes those charges on to you. When you have electronic deposit there are no associated fees and they are happy to pass those savings on to you also.

The first thing you should do is check with your employer to see if they offer this service. If they do you will need to provide tracking and account numbers to them so they can auto deposit your payroll check. Usually they can just accept a voided check.

Once you have established the automatic deposit you should go to your bank and talk to a customer service representative. Inform them that you
are now receiving your payroll through direct deposit and would like to know what benefits their bank offers. You will be surprised at what you can receive when you do this. Bank fees can be as much as fifteen dollars a month. By changing to direct deposit you can save one hundred eighty dollars a year! Many institutions also offer better percentage rates on personal loans or certificates of deposits.

Another plus to using direct deposit is check cashing fees. If you use a check cashing service or cash your checks at the company’s bank, you will find you are paying a percentage of your check for this service. Even if you are averaging five dollars a week to cash your check this adds up to one hundred and ten dollars a year you are literally just giving away. Having your own account and direct depositing your check will increase the amount of money you have to save or spend.

Another advantage to direct deposit is that you may avoid overdraft fees when you have gone over your balance. Many times when a bank sees that a direct deposit is pending they will waive the fee or hold the withdrawal until the deposit clears. This can save you over thirty dollars each time this happens.

Any way that you look at this you can save a lot of money during the course of one year by changing to direct deposit. Since every penny counts this is a very smart move.

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