What are the advantages and disadvantages of using direct deposit?

According to Go Direct, a national campaign sponsored by the U.S. Department of the Treasury and Federal Reserve Banks to motivate more Americans to choose direct deposit for federal benefit payments, direct deposit has many advantages.

Direct deposit is faster, easier, and more convenient than checks. It also totally eliminates the risk of lost or stolen checks because money goes directly into a recipient’s account. In addition, direct deposit gives recipients faster access to, and more control over, their money.Money will be deposited into their account at exactly the same time each month, and they can access their funds virtually anytime and anywhere.

Perhaps the biggest disadvantage of direct deposit is undoing the arrangement if you are moving or want to change financial institutions.This will require contacting your employer (if your paycheck is direct deposited) or the Social Security Administration (if Social Security benefit payments are direct deposited) and completing the necessary paperwork. For this reason, you should find a bank or credit union that you are satisfied with before making direct deposit arrangements.

For more information about the Go Direct campaign and the benefits of direct deposit, see www.GoDirect.org.

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