In today’s modern time, there are numerous modes of payment and one can transfer money to someone else’s account very quickly and easily. One such method is the direct deposit payment mode which is fast, easy, and secured. It is used by many people today to transfer funds and receive funds as well. Today, we will give an overview of this mode of payment and after reading the post, you can also enable the method for your own use.
What is Direct Deposit?
It is an easy way to get your money directly deposited in your bank account. Also, it is very safe and a convenient method preferred by many bank customers. In this method, your funds will be electronically transferred by the opposite person and you will receive the money very quickly. It is a very secure and less time-consuming method so very much used by people these days.
There is no hassle of writing down a cheque and depositing it in the bank. The process occurs online and you can transfer your money to someone else very quickly or receive money from someone else too. You can pay any bill or rent via this method if the opposite person is accepting the electronic funds’ transfer.
Who Can Use It?
Anyone can use this method for sending/receiving money until and unless the opposite person is also having the facility of direct deposit. For example, if your employer sends you money via this method, you can receive it in your bank account. Similarly, you can pay your rent, insurance bills, or any other bill via this method if the opposite person is also accepting the funds via this method.
How to Sign Up for this Method?
There will be a direct deposit form that you need to fill out. Your employer will provide you this form, if you are not sure at that time whether to use this service or not and don’t fill out the form then also no issues, you can fill it later on too.
The form will ask you for the following details:
- Your bank account number
- The bank’s routing number
- Whether you have a savings account or a checking account
The form may vary from institution to institution. It might also ask for personal information such as your name, surname, address, and can also ask for your bank’s name, address, etc. You might need to give a voided check so that your employer can verify your bank account information.
You will find the bank’s routing number on the bottom of your check. It is a nine-digit number and it is also visible on the bank’s website, mobile application and also you can take the help of the support portal if you can’t find it.
If you don’t have any account then you need to open it first in any appropriate bank and then you can fill out the form.
How much time will the setup process take?
The signup process can be done in a few minutes but the electronic fund transfer initiation may take a few weeks as your employer has to verify your bank account details. It is possible that you may receive a paper cheque for the first time as the verification process is getting delayed from your employer but it is a rare case and it gets acted upon quickly.
Can you split your direct deposit between multiple accounts?
Yes, you can. If you want your salary to be deposited in multiple accounts like 50% in one account, 20% in the second account, and the remaining 30% in some other account then you can do so. For this, you have to mention the details of all the three accounts while filling up the form.
There might be a case where you have to fill out different forms for the different bank account details. Make sure that you fill correct information in it and check it twice as any discrepancy in the form can cause a delay in the initiation of the fund transfer.
How Long Does Direct Deposit Take?
The process is very quick and the funds get transferred within 1 to 3 business days. You will get notified when the amount gets deposited in your bank account. You can start spending the money instantly when you get the money in your bank account.
How Does it Technically Work?
As said, direct deposit transfers the fund digitally from one bank account to another. This is possible with the ACH transfer. Now, you might be thinking that what is this ACH transfer?
An ACH transfer is a method used by banks to transfer money electronically. This transfer removes the need for sending any physical check or cash. All the fund transfer takes place instantly and there is no hassle in it. ACH transfer is used for most of the bank-to-bank transfers.
Direct deposit from a third-party payment service
Let’s say you use a third-party payment service like PayPal. You will be sending and receiving money in your PayPal account, that money will be stored in your PayPal account and if you want to transfer it into your bank account then you can do so with the Direct deposit fund transfer.
For doing this, you need to submit your bank account details and routing number to PayPal. They will verify it and then you can initiate the fund transfer process. Similarly, you can go with any third-party services that are allowing this facility.
Also Read: How to Use PayPal on Amazon: Know it Today
So, here was an overview of the direct deposit fund transfer method of transferring funds from one account to another account very quickly, easily, and securely. I hope you got the complete idea of it and will do it as needed! For more information, visit Financeshed.