Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Direct Deposit

What it is:

Direct deposit refers to the electronic transfer of a cash payment into the recipient's bank account.

How it works (Example):

Direct deposit is a method of payment where a paying party, such as an employer or government agency, electronically transfers a payment in cash from its bank account into the bank account of the payee. Salaries and tax refunds are examples of payments commonly made through direct deposit.

Why it Matters:

Directly deposited money "clears" automatically, that is, it is immediately available for withdrawal, and does away with the need for and inconvenience of a paper check.