There’s a very short list of things that really haven’t changed in the past 50 years: apple pie, your fourth-grade teacher’s fashion sense and paper checks. Despite the advances that have been made in financial technology, paper checks are really about the same instruments they always have been. In a digital world, they’re increasingly expensive, cumbersome and insecure.
While larger companies have been using an all-electronic system for paying their employees for years, many smaller employers already have or are moving to direct deposit of your net pay as well. Direct deposit transmits your paycheck from your employer’s business account directly into your checking, savings or pre-paid account(s). You still get a pay stub or an electronic equivalent from your employer that lists the amount of the transfer along with any deductions, like taxes, health care or retirement.
What you won’t have to do is hold on to that check until you can find time to get to a branch. Payroll deposits clear instantaneously, which means the money is generally available in your account the same day.
Direct deposit really is the way of the future. Many large employers and some benefit providers require it, and it’s easy to see why. Let’s look at three reasons why direct deposit is right for you.
Think like a criminal for a second. A paycheck is the largest check most people see on a regular basis. This makes it a tempting target for theft. Think about how your employer would react to someone picking up your paycheck for you. Someone could pretend to be a spouse, babysitter or friend doing you a “favor.”
Believe it or not, the process of payroll is incredibly complicated for companies. Many of them hire outside firms at great expense to ensure they’re accurately paying their employees in compliance with various state and federal regulations. One of the costs involved in payroll production is the printing of checks. Paper checks must be printed, signed and recorded, all of which requires labor.
These savings may seem insignificant, but they add up quickly. Your employer spending less money on payroll means more money to pay you. Whether those cost savings result in a lower-priced product, more investment in the business or higher wages, you benefit. When your employer comes out ahead, so do you.
Obviously, direct deposit saves you an errand every pay period. The stress of fighting rush-hour traffic to make it to a branch office before closing time on payday is considerable. There’s also no need to worry if you got your paycheck deposited in time for same-day processing. Say goodbye to account guessing games.
Beyond the obvious conveniences, direct deposit opens up a slew of other possibilities. You can more easily automate your savings by depositing a portion of each payroll into a savings account and the rest into your checking. You can pay bills more easily online since you get confirmation your funds are available. You may also be able to secure lower fees or a higher interest rate on your checking account!
Paperless payroll saves trees, it saves time and it saves frustration. It does all of this while being safer, faster, and more secure. If you’re unsure about your direct deposit options, stop by or call Destinations Credit Union. Our helpful representatives can get you the information you need to set up direct deposit and can even help you organize your deposits to meet your financial goals.
Call, click, or stop by Destinations Credit Union today! If you are getting a tax refund, make sure you designate Destinations Credit Union to receive your refund via electronic deposit!