Direct deposit has become a very popular way for people to have money deposited into their bank account without having to actually visit the bank. Direct deposit is a form of EFT which stands for Electronic Funds Transfer.
When it comes to direct deposit, employers can electronically deposit a payroll check into an employee’s bank account. This all but eliminates the need for paper checks and visits to the bank to deposit those paper checks. In the U.S. direct deposit has become very popular with many agencies and employers because it reduces the amount of time they have to spend on preparing and handing out paper checks. For some agencies, such as the Social Security Administration, where millions of checks need to be processed each month, these savings can be dramatic.
In addition to the SSA, other government agencies that use direct deposit regularly include the Veteran’s Administration, state unemployment services, the Internal Revenue Service, and a whole host of other agencies.
This type of electronic transfer has many advantages. One of the most important and useful to consumers is that direct deposits will usually post faster than...