What Is Direct Deposit and How Does It Work?
Direct deposit is an efficient and secure way to send money, like paychecks, Social Security benefits, government benefits, tax refunds, and more. Because direct deposit is an electronic transfer of funds directly into your bank account, it eliminates the need for depositing a physical check. This means you will be able to access your money more quickly, without needing to take any extra steps.
Direct deposit is simple to set up and can make it easier to manage your sources of income so you can stay on top of your budget. It’s a simple change that can make a significant difference in how you manage your finances.
What Is Direct Deposit?
Direct deposit is a reliable and secure way to electronically transfer funds directly into an individual's bank account. Direct deposit is often used by employers when paying salaries and wages, by the government to pay benefits like Social Security or disability, and by credit unions and banks for secure transactions.
The process of direct deposit involves the payer (like your employer or a government administration) initiating a transfer through an Automated Clearing House (ACH) network. This process is seamless, fast, secure, and convenient.
What are the Benefits of Direct Deposit?
First and foremost, direct deposit is fast. Recipients of direct deposit have immediate access to their money without the delays associated with traditional check processing. Additionally, direct deposit is:
- Convenient: You get your money faster because you don’t have to go to the bank to make a deposit and then wait for the check to clear.
- Reliable: Funds are available on time, without delay from postal services or bank processing times.
- Secure: Direct deposit reduces the risk of lost or stolen checks and potential fraud associated with paper checks.
Plus, at Credit Union 1, you can get paid up to two days sooner, with CU1 Early Pay. This means your direct deposit will be available for your use up to two days before your actual payday.
How Can I Switch to Direct Deposit?
To set up direct deposit, you will likely need to complete a direct deposit authorization form with the payer (like your employer or a government administration). That form will include information like:
- Your Social Security number
- Your financial institution's routing number
- Your account number
- Type of account (checking or savings)
At Credit Union 1, members can easily switch their direct deposit online through Digital Banking and the Direct Deposit dashboard powered by ClickSWITCH. The process is simple and streamlined and can be accessed 24/7.
If you are currently a CU1 member and would like to switch your direct deposit to your CU1 checking or savings account, simply log in to Digital Banking to get started. Reference the CU1 FAQs for more detailed instructions.
Not yet a CU1 member? Become a member in minutes online, at your local branch, or over the phone today.