Direct Deposit Setup, Benefits and Routing Number

Nov 4th, 2014     Payments

Direct deposits are regular automated money transfers done between bank accounts electronically. The payments are done as per the date, time and period chosen by the payor. Direct deposits are safe, secure and easy, they save the hassles of going to a bank to collect salaries, social security benefits etc. In this new era of technology, it’s a gift to mankind. With direct deposits, the payee (receiver of payment) need not to worry about check clearances as the payment will be done with direct cash via electronic transfer.

Setup Direct Deposits for Receiving Payments

Direct deposits are most suitable for all age groups that are eligible to receive funds via direct deposit. Customers require checking or saving accounts with banks to be able to receive and pay direct deposits. Setting up a direct deposit leaves us with an easy procedure for regular payments, while giving us the benefit of saving time.

The procedure to set up a direct deposit is listed below –

  1. Direct deposits can only be set up when there is an agreement between the persons who are paying and receiving the money.
  2. The payee (receiver of the payment) should find out if the payor’s bank has the service of direct deposits.
  3. If yes, the payee should take a direct deposit form from the payor.
  4. Take a void check along with it for submission. A void check has the word void written across it.
  5. void check for direct debit with routing number

  6. Fill in the routing number on the form, the routing number is listed on the bottom left hand side of the check. You can find routing number for direct debit form on our website.
  7. Fill in the checking account number on the form. The account number is next to the routing number on the check.
  8. Fill in the bank address on the form by calling the banks telephone banking representatives or by checking online.
  9. After filling the details, give the form to the payor or employer.

Direct deposit sample form
By following the above steps the direct deposits can be set up successfully and is effective usually within 1 month.

Best Uses of Direct Deposits

Direct deposits are usually set up for –

  • Payrolls
  • Social security benefits and other government payments
  • Tax refunds (if you choose direct debit option)

In case of payments made by employers to employees the direct deposit can be made between two accounts such as the savings and current accounts. This can be done only by the approval of the employer. If the payees have an additional amount in their account and choose to save, they can certainly set up a standing order to make regular money transfers from their current to savings account.

Electronic transfers are secured by bank, if there are any issues with the transfer. Banks will investigate the reason for the error, if the bank is held liable they will reimburse the cash. If not, they will check what caused the error and rectify it based on the scenario. Direct Debit is quite safe and secure and mostly error free so you can use it confidently.

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