Direct deposit is a convenient and secure way to electronically transferring funds from one account to another. With direct deposit, people can automatically deposit payments, such as salaries, wages, pensions, or government benefits, directly into their bank account. Instead of receiving a physical check or cash, the funds are directly credited to the recipient's account.

What You Need To Know

Direct deposit eliminates the need to physically deposit paychecks or benefit payments at a bank or cash a paper check. The funds get automatically deposited into one's bank account on the scheduled payment date. This reduces the risk of lost or stolen checks, as there is no physical check to handle, making it a safer and more secure way to receive payments.

Direct deposit can be used for various types of payments, including paychecks, retirement benefits, tax refunds, and social welfare payments. To set up direct deposit, individuals typically provide their employer or the paying institution with their bank account details, such as the account number and routing number. The payer then processes the payment electronically, and the funds are deposited into the designated account on the agreed-upon date.