What is it?
Use Direct Deposit to have your pay directly sent to your checking or savings account rather than issuing a paper check. These deposits arrive and are made available to you more quickly than paper checks, and can be automatically divided among different accounts based on your direction. You don't even have to go to your bank.
Direct Deposit is the most widely used electronic payment. In 2007, 4.4 billion payments were made using Direct Deposit, a 5.1 percent increase over the previous year. As many as 145 million Americans use Direct Deposit to receive their pay or government benefits.
More than half of federal tax refunds are received through Direct Deposit (52 million in 2005, a 7 percent increase over 2004). And close to 80 percent receive their Social Security benefits through Direct Deposit.
Did you know that Direct Deposit has been around for almost 40 years? It has a proven record of success - 97% of people who get paid via Direct Deposit are satisfied with it.
Setting up Direct Deposit
Establishing direct deposit of your paycheck requires you to go through your employer, who will have the paperwork needed to set it up.
Your employer will want your Social Security number and a voided check from your checkbook containing your bank's routing number (a number assigned by the Federal Reserve to identify your bank) and your account number.
The routing number is the first set of numbers on the bottom left of your check. The routing number is followed by your account number and the number of the check itself.
The Voucher System
It may take a pay period or two for direct deposit to kick in. After it does, instead of your regular paycheck, you will receive a voucher from your employer stating how much was deposited to your account. The voucher will look similar to a real check, with all the same information on taxes, benefits and other deductions, that were on your paper paycheck.
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