How Long Does Direct Deposit Take?

Direct deposit puts your paycheck straight in your bank account.

Direct deposit is a convenient and free way to receive income such as your paycheck, government benefit or monthly pension. It’s also fast, with money from a direct deposit usually arriving in your bank within one to two days after it’s issued.

Using direct deposit is a safer and more efficient way to send and receive money electronically since the money goes straight from the issuer into your bank account, reducing the amount of time and people needed to process the transaction. Many banks encourage customers to set up direct deposits by waiving a bank account’s monthly fee when they start using the service.

How long does direct deposit take? Here’s everything you need to know:

How Does Direct Deposit Work?

With direct deposit, an employer or other entity can electronically transfer funds from their account to yours. The money is sent via the Automated Clearing House (ACH) network, which moves money between banks to save you the hassle of waiting for a check in the mail or having to go to the bank to deposit it.

Employers also find direct deposit convenient because they can process payroll much faster without having to deal with issuing, signing and mailing checks. In addition to getting your paycheck deposited straight into your bank account, you can also use direct deposit for:

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  • Child support payments
  • Federal and government benefits
  • Investment-related dividends
  • Retirement pension
  • Social Security
  • Tax refunds

Read More: 8 Reasons Why Your Refund Will Be Late This Year

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How Long Does Direct Deposit Take?

If you’re wondering how long direct deposit takes, the time frame depends on the entity issuing the funds. For example, if your employer uses payroll software to process your paycheck and send the transfer, they’ll set a pay date. That’s the date you can expect to see the funds in your bank account.

The payroll software will remind your employer to process and submit the direct deposit somewhere between one and four days before your pay date. Once they submit the payment, the funds are transferred to your account on the pay date.

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Is Direct Deposit Instant?

Although the process is fast, you might not be able to access your funds instantly. In many cases, you can withdraw the funds the same day they were received, but in other cases, you might not be able to access it until the next business day.

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Advantages of Direct Deposit

Receiving your benefits or paycheck via direct deposit can simplify your life. You won’t have to worry about waiting for a check or making time to take the check to the bank for deposit. Here are several other advantages of direct deposit:

  • The funds might be available sooner than if you deposited a check.
  • Many banks let you split your direct deposit between more than one bank account so you can automatically grow your savings.
  • Your bank might waive your account maintenance fee if you receive regular direct deposits.
  • You don’t have to worry about check fraud or identity theft from a lost or stolen check.
  • You won’t lose or misplace the funds as if they were cash.
  • Employers save time and money on processing payroll and mailing checks.

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How Do You Set Up Direct Deposit?

Direct deposit is easy to set up. Here are the typical steps:

1. Request a direct deposit form

You can ask your employer for a form or download one directly from your bank. In many cases, your bank’s direct deposit form already includes the routing number and other details you’ll need. Here are the links to direct deposit forms for some of the most popular financial institutions:

If you receive federal benefits, you can download the federal direct deposit form from the U.S. General Services Administration (GSA).

2. Fill in the form

Here’s some of the information you might need to provide on the direct deposit form:

  • Name
  • Bank routing number (9 digits)
  • Account number
  • Social Security number (not all banks ask for this)

Some banks might ask you to attach a voided blank check that confirms the information you provided. If you use a large national bank, make sure the routing number you use corresponds to your local branch. Some banks have different routing numbers for different states and types of transactions. You can find the routing number on your personal checks, bank statements, bank website or by contacting your bank.

Some direct deposit authorization forms let you assign how much money you would like direct deposited as a percentage or dollar amount. For example, you could request that your employer deposit 50% of your paycheck to your checking account and 50% to your savings account. Or, you can set an amount for direct deposit like $1,500 and receive the rest of your paycheck as a check from your boss. Splitting the amount you receive between accounts is a great way to grow your savings or emergency fund by designating a set percentage to go straight to your savings account.

3. Sign, date and submit the form to your employer

Once you’ve completed the form, you’ll need to sign and date it and then submit it to your employer or direct deposit issuer. You might want to keep a copy of the authorization form and follow up with your employer to confirm they have set the direct deposit up.

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How Long Does It Take for Direct Deposit To Take Effect?

Depending on how long it takes for your employer to process your request, you might see your first direct deposit in as little as one to two weeks or as long as several payroll cycles.

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What Are Alternatives to Direct Deposit?

If you don’t have a bank account but still want the convenience of a service similar to direct deposit, here are some alternatives:

  • Paypal or Venmo: These payment systems let others send money directly to your account, which you can then withdraw at an ATM using your PayPal or Venmo card.
  • Prepaid Debit Card: Your funds can also be loaded onto a prepaid debit card, which you can use to pay for items or make withdrawals at an ATM.

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