Direct Deposit Benefits

Direct deposit of your paycheck or government check has been around for years. It can be a safe, convenient way to handle your money. Surprisingly, a study sponsored by the federal government found that the baby boom generation is less likely to use direct deposit than the generation before.

The study found that 72% of those 65 and older use direct deposit for their government checks, but only 59% of those between 45 and 64 used it. When asked why they don’t use direct deposit, people said they liked going to a financial institution, they didn’t trust direct deposit, or they liked getting a paper check.

This trend is unfortunate. Using direct deposit provides many benefits, including:

• Direct deposit is much safer than getting a paper check. You don’t have to worry about your check being lost, misplaced, or stolen.
• Your money is in the financial institution and almost always available for use on your payment date. You don’t have to make a trip to the bank to deposit your check. The funds are guaranteed to be in the bank.
• It saves money. For example, the federal government estimates it costs 75 cents more to mail a check than to use direct deposit. For them, that could mean a savings of $120 million per year.

For these reasons we strongly recommend direct deposit. To start direct deposit of your paycheck, ask your employer to provide you with information on how to sign up. For federal government payments, your local bank or credit union can help.