By Martin A. Smith, CRPC®, AIFA®, President, Retirement Planning Financial Advisor™, Wealthcare Financial Group,...
Making use of a dedicated direct deposit can help you build up your savings. This is a fund that is electronically deposited to your account rather than through a paper check. The most common use for direct deposit is for income tax refunds or paychecks. Direct deposits are a popular way of making payments because it removes the risks involving loss of checks or the need to visit the financial institution physically to make a deposit. Direct deposit ensures that an employee’s pay is made available in their accounts almost immediately, even at midnight before the payday in some cases. Another benefit is that the deposit made does not have to undergo a check clearing wait period. As opposed to direct deposit, paper checks can take almost a week to get deposited into an account.
Direct deposit is a significant benefit provided to the employees. It can be used as an excellent financial planning tool, since it allows people to receive their payment in different accounts as they wish. By doing so, saving and investing adds up. Many workers receive their payments via direct deposit, and most consumers are found to be satisfied with direct deposits.
Also, the deposit method helps the government, companies, and even individuals to save a lot of money. For patrons, the direct and indirect cost of depositing a check is usually more than using direct deposit once you factor in time, postage, and driving to your financial institution.
Consumers can benefit from direct deposit immensely as it is secure, convenient and fast. You can’t lose a direct deposit payment, and it also allows people to access their money with ease at anytime vs. a traditional check. Other than getting paid, direct deposit also helps a person in expense reimbursement, travel advances, and any other forms of payments.
Direct Deposit to Automate Your Savings
The trick to automating your saving is to divide your direct deposit into different accounts. Several direct deposit programs will allow you to split your deposit in four ways. This will allow you to automate your savings and helps you to spend only the specific amount you want on each account. For instance, you can set up a direct deposit that pays a certain amount to your savings, a certain amount to an account to pay your debts and the rest of the payment to your checking account for your day to day expenses. You can split the direct deposit according to your needs.
Easily direct your salary to your high-yielding savings account each time you are paid. The savings will gradually accumulate.
How to Use Direct Deposit to Help You Save