When you’re getting started with a new job, you need to establish how you want to receive payment.
There are a couple of ways you can receive payment. Typically your employer will offer payment through checks, cash, or direct deposit. By filling out a simple direct deposit authorization, employers can directly send payment to employees’ bank accounts. Direct deposit is also the most used of the payment options mentioned, and for a good reason.
If you have the choice to decide how to receive payment, you should opt to receive direct deposits. This post will go over how direct deposit work and several reasons you should opt for it.
How direct deposit works
Direct deposit can be made through either paper-based transfer (cheque) or electronic transfer (e-cheque). In the case of a paper-based transfer, the bank withdraws money from an account and then deals with the clearing process, after which it is deposited into another account. On the other hand, electronic transfers are made electronically without going through physical checks or cash.
Provides more security
Direct deposit has long been considered a more reliable method to get paid directly into an employee’s bank account. Employers and employees alike see the direct deposit as a more secure, simpler, and less error-prone payment method.
There is little risk of losing your check through direct deposit since it gets deposited into your bank account at the same time every month. This also makes it virtually impossible for you to forget to cash your check as there is no way of it getting lost. It’s also far less likely to get physically stolen compared to a check or cash.
It’s consistent
As mentioned, direct deposit allows you to receive your payments at the same time every month. This is helpful for employees as it can help them stay up to date with automatic payments pulled from their bank accounts.
Additionally, once you sign up for a direct deposit, you automatically receive your money instead of having to pick it up from a pay-point. When you have to pick up a check or cash payment physically, it’s easy to forget to deposit it. In the case of checks, sometimes you might forget to deposit them to the point where the check expires, which is bad.
Better control
Direct deposit provides greater control since employees can easily see how much money they are getting paid every month through their bank account statements. This is also helpful as employees will be able to track how much money they’ve earned throughout the year and what they’ll taxes will be like.
Employees can also monitor when they are getting paid, how much they are being paid, and how often they get paid.
It’s convenient
One of the main benefits of direct deposit over other payment methods is that it’s far more convenient. You don’t have to go anywhere or fill anything out in order to receive your money. All you have to do is use your bank account details and receive the payment.
Additionally, many people nowadays can check their bank accounts on their smartphones, making it easier to check if they received the money in their bank account. It can take less than a few minutes to log in and see if money has been deposited.
In conclusion, direct deposit provides an easy and secure method of payment which has several advantages over other forms of payment such as checks and cash. It’s more consistent, offers more control, and offers greater convenience for both employers and employees alike.
Although there are a few drawbacks, the direct deposit remains a much better payment system than the other options available.
