Direct bank deposit allows you to transfer funds into another bank account electronically without getting to visit a bank and then using a paper deposit slip. The recipient is credited immediately because the funds are transferred with the help of a network system called automated clearing house (ACH).
When a new bank account is opened, some bank processes and due procedures have to be followed conscientiously, and usually, for most banks, some banking operations are not allowed on a newly created account until a certain time when the account is fully ready for all transactions.
Banks that offer early deposits allow their customers from an early stage of their account opening to make direct deposits as well as other financial transactions.
It is advisable to use banks that offer early direct deposit because it will give you the following comparative advantage:
Gives convenience. It is comparatively secured. Helps with proper finance management. Makes budgeting easy and manageable. Efficient payroll processing and management
Give convenience
With direct deposit, the risk and worries of misplacing or losing paper checks are mollified and transactions can be initiated at ease and from any position, the customer finds himself, provided he has access to the network and electronic devices needed.
It saves time
The time taken to direct deposit or carry out a transaction is optimized compared to visiting a physical bank where some time-consuming protocols will be followed before the deposit is made.
It is comparatively secured
The network responsible for direct deposit keeps all transactions more secure compared to physical paper checks. For transactions to be completed successfully, some authentications and verifications have to be carried out, unlike physical paper checks.
Helps proper finance management
Direct deposit helps customers to manage their finances without stress as it will help them receive and make payments without getting to visit their banks and using paper checks. Businesses can manage their finances as they can view the analytics of their periodic income and expenditure.
Makes budgeting easy and manageable
Banks that offer early deposits help make budgeting and management easy as it helps handle monthly expenses such as utility bills, subscriptions, loans, and other statutory deductions.
Efficient payroll processes and management
Banks that offer direct deposit ease businesses and companies to process payroll, and make early payments of salaries and wages, reducing recording keeping and payment delays because money is transferred directly to the employee’s bank account.
How Direct Deposit Works
Direct deposit is a method that is safe and convenient to make and receive payments. Funds are transferred or deposited directly into a recipient’s account with the help of an electronic network. For a fund transfer from a sender to a receiver, some vital information about the receiver has to be provided for a successful transaction. The receiver’s bank name and account number have to be provided, most times the account type is also required. Some steps are traversed for the transfer to be successful. These are:
Input: where the receiver’s details are supplied. Validation: the network checks whether the supplied data is correct and the customer exists in the associated bank. Authentication: here, the sender authenticates that the transaction is authorized by supplying some identification details such as a password, biometric, or face recognition.
It can take quite a while ranging from days to weeks for direct deposit to be set up. The intended depositor needs to have an account with the bank where verified personal information is entered into the banking system. Funds are electronically transferred and are deposited into the recipient’s account almost immediately except if there is a problem with the network on the receiver’s end. Owing to the fact that funds clear automatically with the help of ACH, they are accessible immediately, so the bank doesn’t put the customers on hold
Direct deposit is most commonly used to transfer or pay an employee’s salary, loan refunds, investment capital, payments of interest from investments, Bill payments, and other utility charges are also made using the direct deposit.
How Direct Deposit Works
direct deposit is a method that is safe and convenient to make and receive payments. Funds are transferred or deposited directly into a recipient’s account with the help of an electronic network. For a fund transfer from a sender to a receiver, some vital information about the receiver has to be provided for a successful transaction. The receiver’s bank name and account number have to be provided, most times the account type is also required. Some steps are traversed for the transfer to be successful. These are:
· Input: where the receiver’s details are supplied.
· Validation: the network checks whether the supplied data is correct and the customer exists in the associated bank.
· Authentication: here, the sender authenticates that the transaction is authorized by supplying some identification details such as a password, biometric, or face recognition.
With the numerous benefits that come with banks that offer early deposits, it is strongly recommended that individuals, corporate, and government establishments should use the services of banks that offer early direct deposits such as:
ChimeWealthfront Cash AccountAxos BankLendingClub BankAlbert CashAndo SpendingCapital OneCheese AccountFifth Third BankGoBank
How do I start using these banks?
The first thing you need to do is to locate the bank within your reach and create an account supplying the required details and you’re ready to go.
How much do I need to open an account?
Each bank has its minimum deposit, just locate the bank and all information will be provided.
