Direct Deposit: Financial Opportunities from your Credit Union

Years ago, the idea of “direct deposit” was regarded with considerable suspicion. Employees thought their companies were somehow benefiting from this service. Some of them thought they were not in control of their money, and many felt that the system would somehow break down, and they would be without funds when expected, and they would not have a “real” check to prove they did have the money coming. Times sure have changed! Now it is a rarity not to have direct deposit services available to you. And more and more employees are realizing the considerable benefits direct deposit can offer.

When you receive a “paper” paycheck, you must take that check to your credit union to deposit or cash it. Depending on when you can arrange to physically take the check to the credit union, there could be several days of delay before the funds are deposited to your account. Not so with direct deposit. Funds are available in your account immediately upon deposit, and there is no delay in accessing them. Many businesses have their headquarters or payroll departments in a central location. Should inclement weather, or poor road conditions, or even a transportation strike intervene, the physical checks could be delayed by several days. Again, weather and other conditions won’t interfere with paying employees who receive their pay through direct deposit.

Another concern with paper checks has to do with theft. Would you believe that millions of Social Security and government checks of one kind or another are stolen or late or somehow misdirected each year? Weigh that against the 39 million Social Security checks direct deposited each year. It may be hard to believe, but NOT ONE of these checks has ever been lost. Some people worry that they will not know whether or not the correct amount has been deposited. They may not be aware that earnings statements are sent to those who receive their checks by direct deposit. So you do receive the information as to what has been deposited. You just don’t have to worry about making the physical deposit yourself.

There are more reasons to consider direct deposit if you are not using it today. If you can be assured that your funds are deposited at the earliest possible moment available, as they are with direct deposit, then your money is working for you at the earliest possible moment. Most credit unions have the ability to divide up your check and deposit some into your usual checking account, and some into various savings or investment instruments. And the quicker the deposits are made, the sooner you are earning money on them, right? Just another reason to convert to direct deposit.

Did you know that your credit union can even arrange to direct deposit your income tax refund? Well, it can. You simply need to fill in your credit union’s 9-digit “routing number” in the appropriate place when you do your return as well as your individual credit union account number. The routing number identifies your credit union. The account number identifies your own account within the credit union. Another reason to take this “route” with your tax return has to do with time-frame—-just like your paychecks. It takes 6 weeks or more to receive your “traditional” refund check. Using the direct deposit option the IRS provides can shorten that wait considerably. Some filers report receipt of their “electronic refunds” direct deposited in only 3 weeks. It’s your money. Wouldn’t you like access to it as soon as possible?

Now let’s talk about some other advantages of direct deposit. Have you ever heard, “pay yourself first?” Well, with direct deposit, you can designate several places to “send” your money on payday. And if you don’t have physical possession of that money, you are far less likely to spend it, frankly. If it’s in a savings account, or even paying off a debt, you may be less tempted to spend it on other distractions. What kind of debts can you address this way? Well, you can assign part of your direct deposited check to pay your car loan, your mortgage, or even your child support commitment each month.

Would it surprise you to know that more than 96% of credit union members have access to direct deposit? Well, it shouldn’t. Your credit union is there to serve YOU. You need only to stop into your credit union branch to set up direct deposit. It’s one more excellent service offered by your credit union.