Direct deposit: Questions Answered

Direct deposit is a convenient way to get your paycheck deposited directly into your bank account. It can save you time and hassle, and it can also help you avoid overdraft fees.

Let's go over some of the FAQs of direct deposit to help you decide if it could be right for you:

What is direct deposit?

Direct deposit is a way to have your paycheck automatically deposited into your bank account. Your employer issues an electronic payment that is automatically transferred into your checking account. This means that you don't have to physically go to the bank to deposit your paycheck, and you don't have to worry about losing a paper check. 

How do I set up direct deposit?

To set up direct deposit, you can contact your employer and provide them with your bank account information. They will then set up a recurring payment to your account on the day your paycheck is issued. It may take a few business days for the deposit to post. Sometimes an employer will ask that you fill out a direct deposit form and return it. 

What are the benefits of direct deposit?

There are many benefits to direct deposit, including:

• Convenience. You don't have to go to the bank to deposit your paycheck.
• Peace of mind. You don't have to worry about losing a paper check or immediately getting it deposited.
• Reduced risk of fraud. Direct deposit is a more secure way to receive your paycheck.
• Avoid overdraft fees. If you have direct deposit, you are less likely to overdraft your account because you will have a consistent deposit coming into your account.

What are the risks of direct deposit?

While direct deposits are generally safe, there are a few possible risks to keep in mind:

• Compromised bank information. If your bank account information is compromised, you will have to contact your employer and bank. But if you need to close down or put a hold on your account, you may have trouble accessing your money, including your deposits. 
• Bank account problems. If there's a problem, you may not be able to access your money.
• Employer mistake. If your employer makes a mistake with your direct deposit, you may have delayed access to your money.

How can I protect myself from the risks of direct deposit?

• Keep your bank account information confidential.
• Monitor your bank account statements regularly.
• Contact your employer and bank immediately if you notice any problems with your paycheck or bank account. 

We will mention, the above are more of a good practice for any banking. Direct deposit is generally the safest way to get your money to your bank account.

What are the alternatives to direct deposit?

If you're unsure if direct deposit is right for you, there are other options for getting your money to your checking account:

• Paper check. This is the traditional way to receive your paycheck. You can deposit at a bank, ATM, or with mobile deposit.
• Mobile deposit. As mentioned above, this allows you to deposit checks using your smartphone or tablet with your bank's app.
• Payroll card. This is a prepaid debit card that is loaded with your paycheck. Keep in mind, that not every employer offers a payroll card, and you will have to qualify before you can get one. 

Which is the best option for me?

The best option for you will depend on your individual needs and preferences. If you are looking for the most convenient and safest option, direct deposit is a good choice. If you have questions about direct deposit or any of your banking needs, a Personal Banker from FNBO would be happy to answer them. Give us a call today!