Definition

An electronic payment method where your paycheck is automatically deposited into your bank account, saving you time and trips to the bank.

What to consider

  • Ensure your employer has the correct bank details for smooth transfers.
  • It speeds up access to your paycheck on payday.
  • Use it to help automate your savings and budgeting.

Real world scenarios

  • Ray appreciates receiving his paycheck via direct deposit, which clears early on Friday mornings. He no longer has to visit a bank.
  • Sophie uses direct deposit splits, sending part of her pay into savings automatically. This strategy helps her meet monthly goals.
  • When Martin changes jobs, he updates his direct deposit details to avoid delayed paychecks during the transition.

Related terms

Employment & Income