Nowadays a multitude of business organizations and companies are using the means of Direct Deposit to pay remuneration to their employees. It has also been considered to be one of the most reliable and convenient ways for the same. Keeping this in mind, it becomes important to know more detail about ‘How Long Does Direct Deposit Take For New Hires?’.
How Long Does Direct Deposit Take For New Hires?
Usually it takes less than three to five business days for a Direct Deposit to clear depending on when the transaction has been initiated by the employer and the mode chosen to do the same. As a new employee, it would most probably take one week to 2 weeks from the start date to receive the first paycheck through Direct Deposit depending on the bank used. Regarding holidays and weekends, the wages might take a bit longer to reach the employee’s account. The money can be used immediately after it is deposited into the account of the employee. In some cases it might take a bit longer to access the money as many banks indulge in various other processing activities.
What is a Direct Deposit?:-
A Direct Deposit is an electronic payment mode that is used in transferring funds/wages from one bank account to another. It is mostly used by an employer to pay the income of their employee directly to their bank accounts on payday. Direct Deposits are commonly used for purposes such as paychecks, tax refunds etc. Nowadays mobile applications like PayPal, Apple Pay and Square carry out the process of Direct Deposit in a speedy manner.
How does it work?
A Direct Deposit is a medium through which the employer (from their bank account) can send the wage of the employee directly into their bank account electronically. This process is made possible by a medium is known as ACH (Automated Clearing House) transfer which electronically transfers funds. In short, it is a digital means for the transfer and exchange of funds/ wages widely used by banks and individuals/businesses. It helps in reducing the need for paper cheques or cash and is done very conveniently and instantaneously. It is also a very legitimate and safe means of transferring funds. Mostly, bank to bank transfers takes place through the ACH transfer. Different mobile applications such as Apple pay, PayPal, Venmo also take place through ACH transfers.
In order to pay wages to the employee through this medium, the employer must create a bank account for the payroll activities. After that, the deposit slip or voided check is gained from the employee so that the employee’s bank account information is inserted into the companies and banks software system. The employer electronically communicates the amount into its ledger. At the point when payday comes, an electronic transmission puts the employee’s wages directly into their bank account. Once the amount reaches the employee’s account, it can be accessed anytime and anywhere and the amount can be used instantaneously.
How to set up Direct Deposit?
1. Get a Direct Deposit form:- Ask the employer or bank/ credit union for a Direct Deposit form either written or online type. On receiving federal benefits or Social Security it is required to get them through Direct Deposit. This form permits a third party to transfer the money/wage to the bank account.
2. Fill the form with account information:- Provide the account information required in the form. The information required to fill up is as follows:- • Account type • Account number • Routing number of bank • Mailing address of bank
3. Confirm the amount of deposit:- Affirm whether you will need to deposit the whole check into one account or spread the sum to various accounts. Most beneficiaries of direct deposit put everything of their checks into their financial accounts, however there is a choice of partitioning the cash to different accounts.
4. Provide a deposit slip or voided cheque:- A deposit slip or voided cheque is required to verify the account number or routing number. On the other hand, it may be required to examine the cheque and send the duplicate on the web. Ensure to state “Void” across the unlimited free pass so nobody can pull out cash from your account with this cheque. This data ought to be appended to the immediate store approval structure.
5. Hand in the form:- Whenever the form is filled, submit it to the manager/employer. The process of Direct Deposit taking effect may require a couple of days or weeks relying upon the financial balance and finance division. Sometimes, the direct deposit will produce results after two compensation cycles. At the point when the deposit is prepared, automatic transfers can be made.
Types of Direct Deposit:-
1. Debit cards:- A debit card is a form of plastic money used for making transactions and purchases without the use of paper money. This card allows the cardholder to directly pay for a purchase from their bank account. ( takes a couple of minutes )
2. Websites and mobile applications:- Direct Deposits can be made through different mobile applications like PayPal, Apple Pay, Square etc. These applications are very simple to use and provide transactions to happen anytime and anywhere. ( takes approximately 5 business days )
3. Money from other banks and external accounts:- Money from one bank account can be transferred to another bank account through Direct Deposit. This is also possible for accounts in different banks. ( takes approximately 3 business days)
4. Green dot:- A Green dot account allows the quick transfer of money whenever required and it also helps in the speedy gain of paychecks for up to 2 days earlier. ( takes approximately 2 to 3 hours )
Alternatives of Direct Deposit:-
1. Cash and Paper Checks
2. Amazon payments
3. Prepaid debit card
4. ACH transfer
Advantages of Direct Deposit:-
1. Direct Deposits are convenient, time-saving and faster as compared to paper checks to both employer and employee.
2. It saves money for the employer and the employees.
3. The funds can be accessed anytime and anywhere by the employee and the use of the funds can be done instantaneously.
4. This method is safer and more reliable than paper checks and other methods. Moreover, it also provides timely payment to the employees.
5. The process to set up Direct Deposit is not very intensive and maintains security as there is no fear of loss, damage or misuse to the amount which is a common issue regarding paper cheques.
In the light of this information, Direct Deposit being a safe, convenient and quick medium has been very popular amongst companies and businesses for payroll activities and it continues to provide enormous benefits to both employers and employees. When companies and businesses employ the ACH medium to pay wages, ACH provides a hand in deciding the kind of Direct Deposit system to use. After all, it highly depends on the rules of the bank chosen which further decides the timing of payments in the context of Direct Deposit. It has become extremely popular in today’s scenario as speed and convenience is a prerequisite for the working class.
Frequently Asked Questions {FAQ’s}
- Is it a safe medium for the transfer of funds?
~ It is a safe and legitimate medium of transferring funds as the transfer of funds takes place electronically from one bank account to another bank account which is a very direct process provided the details given are appropriate.
- Is it a cost-saving medium for the employer and employee?
~ It is a cost-saving method for both employer and employee as the transactions done are digital so the employer saves money for supplies to fill in paper cheques and the employee isn’t charged with any money to withdraw the amount.
- How can an employee sign up for a Direct Deposit?
~ In order to sign up for Direct Deposit, an employee must fill out an authorization form and attach a voided cheque to it. After doing so, this form must be submitted to the County Auditors Office.
- Can the employee access the money anytime and anywhere after it is credited to their accounts?
~ The employee can access the money anytime and anywhere from their bank account after it is transferred as the transactions done are digital and the use of the money can also be done instantaneously.
- What are the limitations of Direct Deposit?
~ When an incorrect transaction is done through direct deposit, it is very difficult to retrieve the funds and holding back the payment process can be almost impossible. Moreover when the banks are switched by the employee, the completion of a bunch of authorization forms has to be done.
- Whom to contact for problems regarding Direct Deposit?
~ In order to resolve problems regarding Direct Deposit, an employee can either contact their manager/ employer or their financial institution. In such cases, the Payroll officer can also be contacted.
