Can You Direct Deposit Into a Savings Account? Should You?

By Ashley Kilroy · July 03, 2023 · 7 minute read

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Can You Direct Deposit Into a Savings Account? Should You?

Can I Direct Deposit into a Savings Account?

Yes, you can direct deposit into a savings account. And it can be a good idea: Putting direct deposits into a savings account vs. checking account allows you to sock away money without manually transferring cash from your checking to your savings account. As a result, direct deposit can automate your savings strategy and get your money to the right place as soon as your employer pays you.

This can optimize your financial gains and help keep you from overspending out of your checking account. Money sitting in checking can tempt you to go shopping or head out to a pricey restaurant dinner.

Here’s how to set up direct deposit to your savings account and a closer look at the perks you’ll enjoy.

Read on to learn:

•   What is direct deposit?

•   Can direct deposit go into a savings account?

•   How do you set up direct deposits into savings?

Direct Deposits Explained

Direct deposit is how you can receive payments, such as a paycheck, without a physical check, electronic check, or cash. Instead, funds go from the payer directly into your bank account. The electronic processing of your paycheck saves you a trip to the bank and is typically quicker than physical forms of payment.

You probably receive payment via direct deposit, as more than nine out of ten workers in the United States do. This automatic process gets money to your bank account with minimal effort by the employee and a lower cost to the employer. What’s more, you can split your paycheck between your checking and savings accounts to optimize your finances.

How direct deposit works:

•   Your employer uses your bank account number and routing number to set up direct deposit.

•   At the end of every payment period (typically two weeks), your employer’s payroll department communicates with the Automated Clearing House (ACH) network.

•   The ACH receives information and deposits money into your account according to your employer’s instructions.

💡 Recommended: What Happens if a Direct Deposit Goes to a Closed Account?

Unlock more when you set up direct deposit with SoFi.

Set up direct deposit and get up to 4.60% APY on your balances and up to a $300 cash bonus when you open a SoFi Checking and Savings account.

How to Set Up Direct Deposits Into Your Savings

Whether you recently started a new job or have worked for the same employer for years, you can put direct deposits into a savings account in a similar way to how you direct money into your checking account.

Step 1. Getting a Direct Deposit Form

As a new hire, you usually complete paperwork during your first week of employment, including a form to set up direct deposit. If you’re not new to your workplace, you can request a new form from your HR or payroll department to add or update your direct deposit information. You’ll then fill out the forms with the necessary information, such as Social Security number and account information.

Step 2. Determining How Much to Send to Savings

Next, designate the percentage of your paycheck you’d like to go into your savings account versus your checking account. For example, you may want 20% of your paycheck in your savings account and the rest deposited in checking.

Step 3. Submitting the Form to Your Employer or Bank

Finally, provide the form along with, if requested, a voided check for your checking account and a deposit slip from your savings account. These documents can help your employer verify the deposits will go to the right place.

Is It Better to Direct Deposit to Savings or Checking?

Direct depositing into your different account types isn’t an “either-or” proposition; it may be a “both-and” scenario. In other words, depositing money into both accounts has advantages, so it’s a matter of what amount to deposit. Here are some points to consider:

•   Depositing funds into your checking account allows you to access your money to pay for both essentials, like rent and food, to fun purchases like clothes and entertainment.

•   A direct deposit into a savings account allows you to build up your savings and earn more interest on the cash you don’t touch. You might even have multiple savings accounts for different goals, such as putting money in an emergency fund or towards a down payment on a house.

Therefore, it can be an excellent idea to deposit as much into your savings account as you can afford. You might follow the 50/30/20 budget rule and allocate 20% of your take-home pay towards your savings.

It can be hard to save money today with the rising cost of living, so automating the process can help you be successful in achieving this goal.

In addition, your deposit allocations should ensure your checking account has the minimum balance your bank requires, if any, so you can avoid banking fees.

Recommended: How Much Should an Emergency Fund Be?

Difference Between Checking and Savings Accounts

Understanding the difference between checking and savings accounts is critical to deciding how much to deposit to each account. A quick overview of checking accounts:

•   Checking accounts are for spending money. Your bank gives you a debit card linked to your checking account so you can make purchases in person and online with funds from your checking account. You also receive checks you can use to pay for purchases and expenses.

•   Because checking accounts have no transaction limits, they are ideal for regular purchases.

•   You can withdraw cash from your checking account by using your debit card at an ATM; you will also probably be able to deposit cash in an ATM.

•   Many checking accounts don’t pay any interest or perhaps a minimal annual percentage yield (APY).

Savings accounts are quite different:

•   Savings accounts are for stockpiling cash and earning compounding interest on your account balance. For example, a savings account with $5,000 and a 3.00% compounding interest rate will earn over $150 annually. It’s advantageous to put money in a savings account because anything you don’t spend will earn a higher interest rate than your checking account.

•   Savings accounts often have transaction limits, meaning you can only withdraw money from your account several times a month (typically six times a month). As a result, it’s best to deposit money you don’t plan on withdrawing into your savings account.

💡 Recommended: See the complete comparison between checking and savings accounts.

Direct Deposit With SoFi

Direct deposit is an excellent way to grow your savings account. Once you submit your direct deposit information to your employer, you’ll automatically receive payments. You can define the percentage of your paycheck you’d like to go to your checking and savings account every time you’re paid. This way, you can accumulate savings without having to transfer money between accounts or risk spending too much from your checking account.

If you’re looking for a way to bank smarter, now is a great time to check out what SoFi offers. When you open a new online bank account with SoFi, you can receive a direct deposit bonus, plus you’ll earn a competitive APY and pay no account fees, which are all good ways to help your cash grow faster. Plus, you’ll spend and save in one convenient place, because we think banking should be easy.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.


How do I automatically deposit into my savings account?

You can automatically deposit into your savings account by assigning a percentage of your paycheck to your savings account when you set up direct deposit with your employer. In addition, you can update your direct deposit preferences with your employer if you want to start automatically moving money into your savings account.

Can I automatically transfer money from checking to savings?

Most banks offer automated savings for customers. This feature allows you to arrange for your bank to automatically transfer a specific amount from your checking to your savings account every month.

Can I deposit monthly in a savings account?

Direct deposit allows you to contribute a percentage of your paycheck to your savings account. As a result, your savings account will receive a specific amount as often as your employer pays you. If this doesn’t suit you, you can check with your bank about setting up automatic monthly transfers from checking into savings.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at


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