Due to its ease and convenience, direct deposit has become a preferred payment method. Once a rare perk available to some employees, it has evolved into the default for most. Direct deposit has transformed how we receive money and manage our finances.
You may already use direct deposit for your paychecks, but it has many other functions and advantages that should not be overlooked or taken for granted. Let’s explore the uses and benefits of direct deposit to ensure you’re getting the most out of this service.
What is Direct Deposit?
Direct deposit is when your funds are deposited electronically into your credit union account rather than via a traditional paper check. This payment process uses an electronic network called the automated clearing house (ACH), which allows deposits to occur instantly between financial institutions. Since funds are transferred electronically, your account will be credited automatically and immediately, rather than having to wait for the funds to clear.
Most employees prefer this method today because your paycheck will instantly be deposited into your account on payday. There’s no need to pick up a physical check and deposit it at your financial institution.
Direct Deposit Uses
While employee paychecks are one of the most familiar uses for direct deposit, it’s not the only instance. You can also use this service to receive a variety of payments, such as:
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Tax returns
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Social Security benefits
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Pension payments
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Other government benefits
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Retirement account payouts
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Investment withdrawals
The Benefits of Direct Deposit
Most institutions will not charge you a fee for directly depositing money into your account. Instead, it’s a no-cost financial service that is packed with perks.
1. LMFCU Direct Deposit Advantage
With LMFCU, You may have your direct deposit/payroll deduction allocated to multiple accounts. For example, you may allocate $100 to primary shares, $20 to a holiday and/or summer club, $20 to account(s) for your children or grandchildren, $100 to a vehicle loan, $50 to a personal loan, etc. There is no limit to the number of accounts that may be allocated to with a single direct deposit.
If you have a LMFCU checking account, we recommend that you allocate a savings deposit as suggested above and set up a separate checking "net pay" direct deposit to your LMFCU checking account. If you don't want your "net pay" to go to your LMFCU checking, then add it to the accounts allocated with your initial direct deposit.
2. Quicker Access
With direct deposits, you don’t have to wait around to receive your paycheck from your employer. Instead, your paycheck will automatically be transferred into your account on payday – usually before you even wake up!
3. Saves Time
By getting your paycheck deposited directly into your checking account, you forego the need to pick up a paper check from your employer or wait for it to arrive in the mail. Plus, you no longer need to make extra trips to a branch or an ATM to deposit your check. You can enjoy immediate access to the funds as soon as they hit your account – with no holds!
4. Enhanced Security
You’ll no longer need to worry about dealing with checks lost in the mail, compromised personal information, or other forms of check fraud. Having payments deposited directly into your account eliminates the opportunity for anyone else to access your funds or information – adding an extra layer of financial protection.
5. Better Record-Keeping
With direct deposit, you’ll be able to access digital records of all your payments received. You can view deposit dates and amounts instantly with online and mobile banking. Plus, most employers enable their staff to access payment details electronically. No more hunting for pay stubs, paper statements, or other records!
6. Easier Budgeting
Knowing exactly when your paycheck will be deposited into your account makes planning and budgeting a breeze. No more guessing games, waiting around for your paycheck, or trying to remember everything you need to pay once you finally receive it.
When your payments are directly deposited, you can plan ahead and schedule automatic bill payments to coincide with your due dates. That way, all your bills are taken care of, and your mind is put at ease. Now, you can enjoy the rest of your paycheck with no extra worries.
7. Reliable Deposits
Even if you are out of town or temporarily unable to access your mail, you can still rest assured that you will receive your paycheck on time. Your payment will be automatically deposited, and you can enjoy instant access to your funds – no matter where you are – including sitting poolside on a fun family vacation!
8. Safer for the Environment
By receiving your payments electronically, you reduce the consumption of paper required to print and mail a paper check. You’re also reducing the costs and emissions from sorting and transporting extra mail. Plus, you can switch to electronic statements and make your environmental impact even less.
How to Enroll in Direct Deposit
The exact information you will need to set up direct deposit may vary from case to case. Generally, you will need the following information:
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Financial Institution Name
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Routing Number (LMFCU routing number is 252076390)
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Account Number (LMFCU: list your core four or five digit account number)
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Suffix/Identifier to indicate account type (checking or savings)
The above information can be found within online banking, on your account statement, or via a voided paper check.
We’re Here to Help!
Setting up direct deposit is quick and easy. From faster access to funds and increased convenience to improved security and environmental sustainability, the advantages are undeniable. So why wait? Enroll in direct deposit with the credit union and simplify your financial life.
If you want to learn more about the benefits of direct deposit or have questions about enrolling in the service, we’re prepared to help. Please stop by the Credit Union or call 410-687-5240 to speak with a team member today.