How Long Does a Direct Deposit Take To Go Through?

February 23, 2021 · 4 minute read

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How Long Does a Direct Deposit Take To Go Through?

With direct deposit, no paper checks are ever issued. The money is transferred electronically, and you can typically access that money on that same day, and sometimes even before your scheduled payday.

Even with all of the financial tech available at your fingertips, like online banking and mobile apps, it can still be a drag to deposit a check.

Whether it’s trying to take a clear photo of the front and back to submit to the bank, which will deposit it pending review, or physically bringing it into a branch, these hassles are easily avoided by signing up for direct deposit.

Because the transfer is done digitally, direct deposit tends to be more convenient, less time-consuming, and more secure than using paper checks.

Most employers now offer direct deposit as an option, and, in some states, even require it.

How Does Direct Deposit Work?

Direct deposit allows someone to electronically send money from their bank or financial institution directly into someone else’s.

The money is sent via the Automated Clearing House (ACH) network, which transfers money between banks and financial institutions.

ACH transfers eliminate the need to send physical checks or cash. These transfers can also happen almost instantaneously because they’re digital and you don’t need to worry about things like proving that a check is legitimate.

Employers also find direct deposit convenient because they can process payroll much faster without having to deal with issuing, signing, and mailing checks.

Direct deposit is a popular way to get your paycheck, but that isn’t the only use.

You can also use it to get a tax refund, Social Security benefits, unemployment benefits, investment-related dividends, as well as other payments.

How Do You Set Up Direct Deposit?

Setting up direct deposit is simple. All you have to do is fill out a direct deposit authorization form.

This usually happens on your first day of work, but you can often choose direct deposit or change your information later on.

Some companies handle this process entirely online and some use a third party to sign you up.

When setting up a direct deposit, especially at a new job, you’ll want to remember to have the following information available to make it as simple as possible:

•  Your bank account number(s) and type of account
•  Bank routing number
•  Bank name and address
•  Whether your putting money in a checking or savings account
•  How much of your paycheck you want to deposit in the account
•  A blank, void personal check

Much of this information can all be found on a personal check, or by contacting your bank or financial institution directly.

Splitting Your Direct Deposit

If you want to split your paycheck between multiple accounts, you can typically add each account to the direct deposit form and specify how much of your pay should go into each.

Most forms ask what percentage of your pay goes into each, instead of just a dollar value. You may need to fill out a new form for each account.

For example, you might designate a set amount of money to move into your savings account automatically, while leaving what you know you’ll need in checking for bills and smaller payments.

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How Long Does It Take to Get Direct Deposit?

Signing up for direct deposit can be done in minutes. However, it may not take effect for a few weeks or even more because the payor has to confirm your bank account information.

With your employer, direct deposit may take one or two pay cycles to become active. During that time, you may receive a paper check as payment instead.

In some cases, an employer may hire an employee at the start of the pay cycle so that the direct deposit authorization process is done just in time for the new employee to receive his or her first payment via direct deposit.

Is Direct Deposit Instantaneous?

Exactly when you will have access to your direct deposit income will depend on the entity issuing the funds.

For example, if your employer uses payroll software to process your paycheck and send the transfer, they’ll set a pay date, which might be a day or two before your regular payday.

That’s the date the funds will be transferred into your bank account, and you can typically access the funds by the end of that day.

To learn the exact time a direct deposit will post to your account, you can contact your bank directly, or watch to see what time of day the first few direct deposits come into your account.

Advantages of Direct Deposit

Receiving your paycheck or other income via direct deposit can simplify your life.

You won’t have to worry about waiting for a check or making time to take the check to the bank for deposit. And, you have access to your money sooner, since you don’t have to wait for a check to clear.

Direct deposit also makes it easier to stay on top of your personal finances because you know exactly when money is coming into your account.

This accuracy can help you manage your money and work towards short-term financial goals, such as paying all your bills on time or saving for an upcoming expense.

If you know when you have access to your paycheck, for example, it’s possible to schedule your other bills or an automatic transfer to savings account soon after the direct deposit is scheduled.

Other advantages of direct deposit include:

•  Your bank might waive your account maintenance fee if you receive regular direct deposits.
•  It reduces the risk of check fraud or identity theft from a lost or stolen check.
•  You can’t lose or misplace the funds.
•  Electronic records don’t clutter draws or fill file cabinets.
•  You can easily track your paychecks, and make sure none have been missed, since there is an electronic record of each payment in one place.

The Takeaway

Direct deposits occur when an employer, government agency, or other third party instructs its financial institution to digitally deposit funds into your spending or savings account on a specific date.

Direct deposit eliminates the hassle of depositing paper checks and, once the funds are transferred into your bank account, they are available to you.

Direct deposit can make it easier to keep track of your finances, pay bills on time, and avoid negative balances and overdraft fees.

Looking for more ways to simplify your financial life? Consider signing up for a checking and savings account with SoFi.

With SoFi Checking and Savings®, you can earn a competitive 1.25% APY–and never have to worry about fees or overdraft charges. Plus, you can easily add your SoFi Checking and Savings account as an option for your direct deposit.

Sign up for SoFi Checking and Savings, then set up direct deposit into your new checking and savings account.

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SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at


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