Getting paid early lets you do more with your money. You can boost your savings and avoid late fees. If you have direct deposit, your employer deposits your paycheck electronically rather than sending you a check you need to cash or deposit at the bank.
However, many banks and credit unions offer the option of receiving your direct deposit up to two days earlier than your regular payday.
Build Your Savings
Direct deposit helps you keep up with your bills, and it helps you reach your savings goals. That’s because you don’t have to worry about getting caught in a paycheck trap and spending more than you earn, which can lead to high-interest loans and credit card debt.
Unlike a paper check, which requires you to physically visit a bank or ATM or use your mobile app to deposit, direct deposits are set up and forgotten. They’re more likely to be processed on time, so you don’t have to worry about losing or stealing your check, which can delay when your money is available.
Many banks and financial institutions, including professionals like Wisely by ADP, offer early direct deposit. You can get your money sooner, which is a significant benefit for anyone who needs cash as soon as possible. When a bill comes due right around payday, early direct deposit means you have more time to pay it without risking a late fee.
Some banks offer this feature for free, while others charge a monthly service fee. To find out more, talk to your bank or review your checking account’s terms of service. You can even sign up for a new checking account online that offers early direct deposit. It is an excellent option for millennials and other digital-savvy workers who want to avoid the hassle of carrying cash around with them.
Pay Your Bills Early
Direct deposit is one of the best tools to help you reach your financial goals. It’s fast and convenient, ensuring you’ll always have money in your account on time to pay bills, buy groceries, or meet other budget-related expenses. Using direct deposit also helps you retain your paycheck and remember to cash it in, which could cost you late fees, overdraft charges, and other penalties.
You can save money quickly by automatically dropping a portion of your paycheck into separate accounts, like an emergency savings or down payment account. Life often throws curveballs that don’t align with payday, and accessing your funds sooner can make a big difference in meeting those surprise expenses.
For example, if you have an auto-payment due the day before your estimated payday but are short on cash and need more to cover it, that late fee can add up quickly.
Most banks that offer early direct deposit allow you to access your paychecks up to two days earlier than traditional deposit dates. However, it’s essential to check with your bank to understand the process and whether this service has a fee. Some institutions will automatically enroll eligible customers or members in this service, while others may charge a fee.
Get Ahead of the Game
When you use direct deposit, it’s a good idea to immediately set aside money in savings. It can assist you in saving money for unforeseen costs and avoiding overdraft fees. Plus, the more you get into a routine of saving money through automatic deposits, the more likely you are to stick to and meet your savings goals.
Another bonus of using direct deposit is cutting out paper waste. About 64% of American workers still receive a paper paycheck and pay statement stub each month. It equates to about 1.8 billion check stubs a year.
That’s a lot of paper, and the environmental impact adds up. With early direct deposit, your money can be in your account a few days before payday. It can be a big help if you need to pay a bill sooner than your next payday or if you want to take a vacation before the end of the current paycheck period.
Save Money
Waiting for payday can be a stressful time. With bills to pay, a fridge to stock, and a tank to fill, having your hard-earned money available a little sooner can help relieve some of that stress. It can also help you save more and build your savings.
The most practical way to get your paycheck is by direct deposit. Many prefer it over a paper check because the payments arrive on time and eliminate the risk of lost or stolen checks. Plus, it usually unlocks extra bank or credit union perks, like cash back.
In addition, electronic deposits reduce payroll administration costs. Creating and signing paper checks, stuffing them into envelopes, and delivering them to employees takes time. Fraud is more likely with paper checks, such as forged signature plates and stolen and altered amounts.
One company found that using direct deposit led to productivity gains of 8.5 to 24 hours per employee. It’s a great idea to set up early direct deposit every pay period to deposit money from your paycheck into a savings account automatically. You can do this by adding a separate savings account to your direct deposit information when you set it up with your employer and then choosing how much each paycheck should go into that account.
Then, once the money is in your savings account, you’ll have to make an effort to transfer it to your checking account, making it harder for you to spend the funds.
