Direct deposit

A direct deposit (or direct credit), in banking, is a deposit of money by a payer directly into a payee's bank account. Direct deposits are most commonly made by businesses in the payment of salaries and wages and for the payment of suppliers' accounts, but the facility can be used for payments for any purpose, such as payment of bills, taxes, and other government charges.

When making a direct deposit by means of electronic funds transfer, the payer also normally enters reference information to make it easy for the payee to recognise who made the deposit and which account to credit. The reference may be an account number, an invoice number, the payer's name, or some other meaningful identification.[1]

The direct deposit facility is often better known by country-specific payment systems used to action these payments such as the following:

Correcting Direct Deposit

To correct a direct deposit, contact the organization responsible for the payment and provide accurate updated bank account details, including the new account number, routing number, and account type. Some entities may require you to complete a change form. Verify the information's accuracy, submit the request through the provided channels, and request confirmation of the change. Allow processing time and monitor your account for successful deposits. Notify your previous bank if you're switching accounts and update any other relevant parties with your new banking information to avoid disruptions in payments or deposits.[2]

Alternatives

If a funds recipient does not have a bank account, but a payer is obligated to pay by electronic funds transfer, alternative payment arrangements need to be made. For example, a US law of 1996 required the federal government to make electronic payments, such as direct deposit, available by 1999. As a part of its implementation, the US Treasury Department paired with Comerica Bank and MasterCard in 2008 to offer the Direct Express Debit MasterCard prepaid debit card, which can be used to make payments to federal benefit recipients who do not have a bank account.[3]

See also

References
  1. "Direct Deposit (Electronic Funds Transfer)". www.fiscal.treasury.gov. Retrieved 2023-09-15.
  2. says, ROBERT SISNEROS (2020-11-23). "How To Correct Direct Deposit With The IRS?". www.zrivo.com. Retrieved 2023-09-15.
  3. "Federal government chooses direct deposit and prepaid cards over mailing checks" Archived 2013-04-23 at the Wayback Machine, BankCreditNews, 15 April 2013, accessed 22 April 2013.
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