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Advance direct deposit, the new bank service to have your payments 2 days before


One of the reasons why people open an account in a bank is because there they can deposit the paper payment checks that they receive month after month. For many families living paycheck to paycheck, receiving their money on time in order to pay their bills on time is a constant concern. Now there is early direct deposits, a new service offered by banks with which you can have your recurring payments 2 days earlier than usual.

There are several banks in the United States that now offer a service where your paycheck is available a day or two before regular payday, only if your employer uses direct deposit to pay you.

“For millions of households and especially those who live paycheck to paycheck, having early access to a paycheck can be the difference between paying a bill on time versus being late or avoiding an overdraft,” said Greg McBride, senior vice president. and chief financial analyst at Bankrate, for the U.S. News. “This adds real economic value to homes.”

What is direct deposit and how does it work?

Direct deposit is one of the most common methods by which employers make payments to their workers. Instead of issuing a paper check, the company is responsible for issuing payments electronically online through a data network. The clearing house (ACH) network is used by millions of consumers and businesses to make payments, such as paying online for your car loan or credit card bill.

Businesses use ACH to pay employees their wages and vendors their bills via direct deposit, without the need to write a physical check or carry cash. For employees to receive their salary, they only need to provide their checking or savings account information: routing and account numbers.

Although this method is simple, easy and quick, there is usually a two-day delay before the funds reach the recipient account. This is a problem for many workers who receive their payment on certain days, such as the 30th of each month, because they could see their money reflected until the 2nd of the following month. If these people have to make a payment on the 1st of each month without penalties, receiving their money until the next day could cause them serious financial problems.

What is early direct deposit

Currently, there are several banks and credit unions in the US that offer the service of early direct deposit. The main feature of this feature is that customers can have faster access to a recurring paycheck. In other words, workers can access the funds two days before the deposit scheduled by their employer, as opposed to having it two days later, as it can be regularly.

For example, for those who receive their income on the 15th and 30th of each month. They will be able to receive their money on the 13th and 28th and have the necessary cash to pay their financial responsibilities.

Another of the great advantages of receiving early direct deposit is that the money will have two extra days to earn interest within the bank account. Take into account that the early direct deposit is a way to have your money ahead of time, it is not a loan. So you must not forget that this money must last the same period of time between one payment and another. So the amount that you spend, which you will not have back.

Banks that offer early direct deposit


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