Don’t Touch My Money

Q.  My employer keeps pushing Direct Deposit on all their employees.  Why should I do that?  I don’t want my employer touching my bank account.

A. We all have issues trusting new things. In this case, unless you employer is Al Capone or Bernie Madoff, it’s probably safe to sign up for direct deposit.  It simply allows your employer’s payroll company to put your paycheck directly into your designated bank account.  Instead of you waiting for a check on payday and then driving it to a bank, you have access to the funds first thing on payday.  You can instantly see if there has been a mistake and can have your employer fix it much more quickly.  You are probably already getting your paystub online so this is just one more electronic way of reducing paper clutter.

Your employer may begin mailing checks the day before payday to show how much hassle it is to deal with a check.  If they do this, think about the delay.  You can’t get your check until the mail actually arrives.  You will then likely get to the bank too late to deposit it. Checks normally don’t clear very fast so you actually do not have official access to your funds until 1 or 2 days later.  Is that really good money management?

Reasons I hear why employees don’t like direct deposit include:

1) I don’t want my spouse to see what I make
2) I can’t get a bank account
3) I don’t trust banks and want to carry cash
4) I don’t have access to a computer so I can’t see if it was processed correctly.

Your employer can help you address some of these issues.  We’ll talk about pay cards for a solution to number 2 in a future post.  Go paperless!