Benefits of Direct Deposit
Benefits of Direct deposit:
Direct deposit involves an employer establishing an account with a local bank, and then paying employee salaries via the Internet using the bank's software (usually made available at no extra charge) or the employer's payroll software, when compatible. No traditional "hardcopy" check is written. Employee salary checks are deposited electronically directly into the employer's account at the bank, and then transferred to each designated employee account. Individual employees have the option of choosing or declining direct deposit of their salary checks.
Benefits to employers include:
- Cost benefits
- Reduced risk of check fraud and lost or stolen checks
- Greater control over payroll and payroll expenses
- Timely payment of salary checks, even when employees are away from the office
- Reduced bookkeeping because of immediate payments into employee accounts (no lost checks, delayed check cashing, etc.)
- Online transaction reports available immediately
Benefits to employees include:
- Timely depositing of checks
- Reduced time required for checks to clear
- Reduced chance of losing checks or having checks stolen
- No need to spend time visiting bank or ATM to deposit checks
- Payments can be divided automatically among designated employee accounts
- There is no cost to employees for direct deposit. In fact, many banks offer free checking services to individuals who will be paid via direct deposit.