20 Aug 10+ Reasons to Use Direct Deposit

By Cathy Rogers
Suwannee Democrat

Live Oak — I can tell you from personal experience that if you are NOT taking advantage of direct deposit it is probably because you are unaware of its benefits. The truth is that the advantages of direct deposit far outweigh the pitfalls. Let’s consider the benefits:

– It’s faster -Usually authorized a day earlier than those receiving a paper check.

– Saves time -Studies show a savings of 8.5 to 24 banking hours per year.

– More secure -Fewer people are involved in the process and view your confidential financial information.

– Eliminates the worry of paychecks getting laundered, lost or stolen.

– No worries when you are sick or out of town.

– Save money – You won’t be tempted to make a withdrawal simply because you are already at the bank to make a deposit.

– Can help you avoid bouncing checks since the deposit is direct and on time.

– Not only does it not cost anything, but many banks provide no-cost or low-cost checking for customers with direct deposit because it saves them the cost of processing paper checks.

– The federal government and many employers will deposit your check a day early if the regular payday falls on a holiday.

– At federally insured credit unions or banks, deposits are insured to at least $100,000.

– You can control where and how much money goes into your various bank accounts, making it easier to “pay yourself first” and build savings.

Ask friends and family if they have ever experienced any problems with direct deposited paychecks or government payments. Chances are, the answer will be “no”. In fact, the only things that might deter you could be that once it is in place, undoing the process if you are moving or want to change financial institutions would involve completing the necessary paperwork. For this reason, you should find a bank or credit union that you are satisfied with before making direct deposit arrangements.

If you are currently unbanked, there are many reasons to open checking, savings, or both types of accounts. The main reason is that it will probably save you money. Some people think that the bank fees are too high but each month they pay some alternative business to cash their checks and to buy money orders or cashier’s checks. If they borrow from those alternative businesses, they will undoubtedly pay more in interest than they would if they borrowed from a bank or credit union.

When banking, there are two key ways to avoiding excessive fees: 1) knowing the rules set by the bank and 2) keeping track of your account balance. If the rule is that you must maintain a minimum of $25 in your account in order to avoid a $6 monthly fee, then making sure that you never spend that last $25 will save you $72 ($6 times 12 months). It may also save you from having overdraft charges as well.

People who do not use banks because they don’t trust them fail to realize that banks are tightly regulated by the federal government. Banks must notify their customers if they change any of their rules. Your job is to read your mail so that you know when you have been notified of a rule change.

Besides the direct costs of being unbanked, some of the indirect costs include the lack of credit history, which is used for more than just loans. Did you know that your credit history is also used in place of character references in the job application process, helps to determine your insurance and cell phone rates, and can assist in car and housing rental decisions? Being banked is a key factor in building assets and reducing debt.

– See more at: http://suwanneedemocrat.com/suwannee/x1938690408/Extension-update-Do-you-take-advantage-of-direct-deposit#sthash.Ii4JwRNa.dpuf