Complete Guide To Using Early Direct Deposit To Get Paid Early

Direct deposit is a great way to get your paycheck faster. It eliminates the need for paper checks and helps reduce the chances of lost or stolen checks. But what if you could access your funds even sooner? Here’s how you can receive your paycheck up to two days earlier.

How It Works

Direct deposit is a way to deposit your paycheck into your bank account automatically. It means you don’t have to worry about picking up or depositing a check in person, and it helps you avoid lost or misplaced checks. Many banks now offer a speedy version of direct deposit called early direct deposit, which lets you access your money up to two days before payday. The earliest you can receive your direct deposit depends on your employer and the bank. Generally, your payroll processor will send a payment file to the ACH network (automated clearing house), which settles transactions between financial institutions. Then, your bank will deposit the funds into your account on the official payment date. If you have early direct deposit, you’ll get your money earlier, so you can use it to pay bills on time or boost savings. Plus, if you have an interest-bearing checking account, the funds will begin earning interest on the day they’re deposited.

Benefits

Direct deposit is an excellent way to have your paycheck sent to you. But watching for your salary to hit your bank account can be stressful, especially if you live paycheck to paycheck and have bills that need to be paid. Some banks and even prepaid debit cards offer an early direct deposit option, meaning you can get your hard-earned money a day or two sooner than expected. If you’re paying for rent, utilities or a phone bill, having access to your funds a little earlier may help you avoid late fees by ensuring the statement is delivered on time. It can also allow you to put more money into savings, which may help you meet your monthly or yearly goals. Early direct deposit is one of the services helping set online-only banks apart from traditional banking institutions, including some that don’t have physical branches. Some of these banks offer this service for free, while others may charge a fee. The amount you’ll be able to access depends on when the payer (your employer, in most cases) submits the payment file, which can vary by payor and bank. But, if you can get your paycheck earlier, it could help ease the stress of budgeting and paying your bills.

Fees

While having your money a few days early may seem like a small benefit, it can help you avoid some financial stressors that come with living paycheck to paycheck. It can also help you save more quickly by allowing you to put aside funds when available rather than waiting for your next payday. Getting your money a few days sooner can also prevent you from paying late fees or incurring overdraft charges, especially for bills due around your regular payday. The banks that offer early direct deposit typically credit your account when they receive the ACH payment information from your payor, normally your employer. However, the timing of this process can vary and depends on your employer’s payroll schedule.

If you’re considering using a bank offering early direct deposit, check the terms and conditions to see how much your money will be available. Some will deposit the money two business days before your normal payday, while others will only make the money available one day earlier. Some online-only banks will make your direct deposits early for free. All you need is to sign up for a checking account and then use the app to set up direct deposit. You can even specify how much of your paycheck you want to be deposited into a savings account or which specific checks you’d like to be deposited first.

Setup

With direct deposit, you don’t have to worry about picking up and depositing a paycheck into your account since your employer automatically deposits the funds electronically. But you can also get your money even sooner by using Early Direct Deposit, a feature some banks offer that speeds up the process by up to two days. The process for enabling this perk can vary by bank, but it typically involves providing your payor (employer) with a special form to complete and share. Your employer or a third-party payroll provider usually provides the state. You may also need to provide your bank’s routing and account numbers.

Regardless of your payor, Discover can accelerate certain qualifying ACH payments, including direct deposits and tax refunds, into its checking or savings accounts (excluding IRA savings). Funds are typically made available when the payer receives the payment file, which may be up to two business days before your scheduled payment date.

Getting their paychecks earlier can help ease financial stress and potentially reduce the risk of missing bills or late fees. Access to your money a little sooner could also give you the peace of mind and flexibility to tackle bigger goals, like saving for a down payment or vacation.