Key takeaways
- With direct deposit, accepting payments is a breeze.
- It just takes a minute to enroll with your bank account's routing number and account number.
- Get your paycheck up to two days early and watch your savings grow faster.
You've worked hard for your paycheck. Getting paid should be the easy part — like picking the best seats when you're first in line for movie tickets or eating breakfast in bed. That easy.
That's why 93% of U.S. workers use direct deposit. Direct deposit does all the work of moving payments into your account, so the money's right where you need it for your next adventure.
What is direct deposit?
Direct deposit is a way of transferring money electronically into a payee's bank account. Direct deposits go through the Automated Clearing House (ACH), the network financial institutions use to move payments around the country.
Direct deposit comes in handy for the following types of payments:
- Paychecks
- Tax refunds
- Stock dividends
- Child support
- Social Security benefits
How does direct deposit work?
An organization that wants to pay you by direct deposit first enrolls you by entering your bank account information in its payments system. Its bank then confirms through the ACH that your information is correct.
To make a deposit, the organization tells its bank to send you a payment. Its bank submits the information to the ACH, which processes the transaction. The money is taken out of the sender's bank account and transferred to your bank. Your bank credits your account, and after a short time, the money is ready for you to save, invest or spend how you see fit.
What do you need for direct deposit?
You can set up direct deposit by filling out a direct deposit form from the organization that's sending you money. You'll be ready in a snap — this form is a really quick one.
Here's everything you need:
- Your bank's routing number. This is a sequence of nine digits that identifies your bank. Find it online through the mobile app or on a check.
- Your bank account number. This also appears in your online account, in the mobile banking app or on a check.
- Your Social Security number.
- A voided check. This isn't always required, but some employers ask for it. You can void a check by writing "Void" on it in large letters in ink.
Tip: When you look at a check, the bank routing number is the nine-digit number on the bottom left. Your account number is the next number on the right.
How long does direct deposit take?
A direct deposit usually takes one to three days to go through.
If you get a direct deposit on a day when the bank is open, the money has to be available to you by the following business day. You might wait an extra day or two if the deposit comes in right before a federal holiday or over the weekend.
If that sounds like too long to wait, there's some good news. Employers start direct deposits a few days before payday, so your paycheck is ready for you on time. Some banks even offer direct deposits from your employer up to two days early. Explore Citizens checking accounts to learn more about this feature.
Pros and cons of using direct deposit payments
For the big stuff like your paycheck or a tax refund, signing up for direct deposit is a no-brainer. But you probably wouldn't use direct deposit to split a coffee order with friends.
Take a look at the pros and cons of direct deposit to see when it makes sense.
Direct deposit pros
- Payments proceed effortlessly after a one-time setup
- You choose the bank account to deposit into, so payments land right where you want them
- Transfers are secure
- Grow your nest egg automatically every payday
- Get your paycheck up to two days early in eligible bank accounts
- No more hassle of depositing paper checks each pay period
Direct deposit cons
- Requires enrollment in advance
- Has a one- to three-day waiting period for a deposit to go through
- Involves sharing your banking information with the sender
