direct deposit

[yorktown]

Do you know anyone that doesn't take advantage of direct deposit ?

A friend at work still gets a paper check for his paycheck.
He says he likes to get the check in his hands.
Then he has to take the check in his hands to his bank or credit union every 2 weeks. Doesn't make sense to me.

I've never had any trouble in all my years using direct deposit.
I use it when ever it's an option.

 

[navychop]

It is a condition of employment where I work. Started that a few years ago, after overcoming some resistance. Guys were used to taking time off work to go to the bank- just too costly to us. One guy liked to take his and cash it at a liquor store (distrusted banks). The liquor store charged a fee, and required him to spend some percent of the check at the store. Yes, I believe that is illegal.

Most people like it now. Convenient.

 

[SKrueger]

Do you know anyone that doesn't take advantage of direct deposit ?

A friend at work still gets a paper check for his paycheck.
He says he likes to get the check in his hands.
Then he has to take the check in his hands to his bank or credit union every 2 weeks. Doesn't make sense to me.

I've never had any trouble in all my years using direct deposit.
I use it when ever it's an option.

Never had a problem plus most banks waive account fees if you have a direct deposit.

He's only got a few years (9) to go anyway. 2018, in August I believe, is the scheduled shutdown of the check clearing system. All payments will then need to be electronic.

 

[HD MM]

The place I work at doesn't offer direct deposit. I have to go to the bank the old fashioned way with a check in hand on a weekly basis.

 

[lakebum431]

Most of my clients now require direct deposit for new employees, but still allow those that are "grandfathered" in with paper checks. I don't see the point of a paper check myself. What a pain in the butt to have to go to the bank to deposit it!

 

[navychop]

He's only got a few years (9) to go anyway. 2018, in August I believe, is the scheduled shutdown of the check clearing system. All payments will then need to be electronic.

I haven't heard of this. Hard to believe- do you have a link?

 

[Bobby]

I found this one from the UK:

Cheques are to be abolished - Telegraph

 

[SKrueger]

I haven't heard of this. Hard to believe- do you have a link?

Oops, my mistake. Went back to the link I had and realized it was the UK they were talking about. But still I would eventually expect us to go that way.

 

[navychop]

TKS

 

[TNGTony]

The objection to direct deposit is the access you grant a third party to your account. In the direct deposit agreement you sign with your employer there is a clause that allows them to withdraw any funds they may have overpaid or for other enumerated reasons.

So the problem that some see is if for whatever reason the third party withdraws in error from an account but the person spent the money already for honest reasons. The employee bounces his payments and it costs him penalties and fees. This is not including the possibility of fraud on either side.

My employer requires direct deposit. But I have had this service for two decades so I am not paranoid. I think I was the first at my banking institution to have direct deposit. However I do know that there can and in my case HAVE been snafus that cannot happen with paper checks. In one instance my employer double paid me then instead of withdrawing the overpayment withdrew the entire amount one day and the next reissued the correct amount. Had I not had the extra cash in my account to cover the day (end of the month Rent, and utilities) I would have bounced every bill I paid that month due to the access I granted my employer. The apologized up and down to me and the other 10 people in my department, but two of my coworkers were out close to $100 in bounced check fees and the embarassment that goes along with this kind of thing. In another instance a different employer neglected to deduct state taxes from my checks for a month. I didn't notice because it really wasn't all that much. But at the time I was living from paycheck to paycheck. When the employer found the error, without notifying me, they withrew the measly $30 they overpaid causing me to overdraw my account costimg me $39 in an overdraft fee. I received the notification of the correction by my employer the same day I found out I was overdrawn by $10!

Of course the answer is to make your direct deposit is, in general, safer and much more convenient than paper checks. But it isn't without its faults. My direct deposit account now holds only the previous check's ammount plus the minimum $500 to avoid fees and allow for the crappy interest the bank pay. Anything over that is immediately transfered to another account my employer cannot touch.

See ya
Tony

 

[bhelms]

I remember years back working part time at Sears. Every week we went to the pay office and received an envelope with our after-tax pay in cash! Now it's DD only for my employer and most others I know, and for the past 2 emps. I've had. I've never had a problem with any of it. My "take home" pay is split to 2 separate accounts at different institutions, one checking and one savings. My current emp. doesn't even give us a pay stub any longer - we have to log into an account for that information if we want it, which I do occasionally like after a change in withholding or etc. But I'm completely OK with that. The less paper I have to handle the better...!

 

[Ronnie-]

Direct deposit would not work for a large number of americans in the lower income bracket. Many of them do not use a bank, EXCEPT to cash a check.

 

[yorktown]

Direct deposit would not work for a large number of americans in the lower income bracket. Many of them do not use a bank, EXCEPT to cash a check.

Pretty much all the banks won't let you cash a check unless you have an account setup with them. I guess those certain americans will have to go to the ripoff check cashing places.

 

[yorktown]

In one instance my employer double paid me then instead of withdrawing the overpayment withdrew the entire amount one day and the next reissued the correct amount. Had I not had the extra cash in my account to cover the day (end of the month Rent, and utilities) I would have bounced every bill I paid that month due to the access I granted my employer.

See ya
Tony

I now remember this happening at one job I had in the 1980s. It didn't bother me but a few people complained they had bounced payments. I don't remember the exact way they worded it but the company basicly said - You shouldn't have all your money coming in and going out on the exact same day.

I agreed with that.

You know how much the company pays you, you know what you can afford, you better be able to manage your money well enough to handle a 24 hour delay like this. Even now at my current job the paycheck money sometimes get's to the bank a day later than normal due to a holiday in the same week as a pay week.

 

[TNGTony]

Sometimes theory doesn't work well in practice. I understand the theory and I wasn't affected, but the point is that the company was at fault. They withdrew twice as much as they should have for what ammounted to a 12 hour loan from the employees. This is something that can happen with Direct Deposit that cannot happen with checks.

 

[yorktown]

Sometimes theory doesn't work well in practice. I understand the theory and I wasn't affected, but the point is that the company was at fault. They withdrew twice as much as they should have for what ammounted to a 12 hour loan from the employees. This is something that can happen with Direct Deposit that cannot happen with checks.

It was probably the payroll company that was at fault. When a mistake is made they have to reverse the mistake(take all the money back out) and re-deposit the correct amount.

I'm sure the company got rich off the interest from your so called 12 hour loan from the employees.

The same thing can happen with paper checks. The company or payroll company can print out paychecks with the wrong amout on it. It no one double checks it the employee get's a paper check with double the amount the have coming to them handed to them. If the employee is dumb enough to cash it even though they know it's 100% wrong they are liable for returning the extra money, or else they get $0.00 on the next paper check. If they get a paper check for 2X the amount the proper thing to do is contact your employer and ask what action to take next. They might even say to shred it since it's already been cancelled. There's no legal loophole that says if you get a paycheck with 2X the amount that it's yours to keep cause it has your name on it.

 

[TNGTony]

I won't continue arguing just to argue, but, no, it couldn't have happened with the paper checks the way it happened with the direct deposit. And I already stated the double payment was an honest mistake. The employer admitted it should have never pulled the entire deposit to fix the error in their apology. And in this case it was not a third party doing the transactions.

You asked a question when you started this thread. I answered it. Once again, because you have never had problems doesn't mean no one else ever has and this gives some people valid reasons not to trust direct deposit.

 

[Ronnie-]

Pretty much all the banks won't let you cash a check unless you have an account setup with them. I guess those certain americans will have to go to the ripoff check cashing places.

Most will if it is written by a person that does have an account with them.

For example, our company has an account with a local bank. We pay our employees out of that account with a check from that bank.

They can take said paycheck to a local branch of that bank and cash it without having an account their themselves. They do it every week.

 

[lakebum431]

Direct deposit would not work for a large number of americans in the lower income bracket. Many of them do not use a bank, EXCEPT to cash a check.

You are right about many people not using a bank and that is a totally different discussion. I personally cannot comprehend why a person doesn't use a bank in this day and age. It makes zero sense.

 

[Ronnie-]

You are right about many people not using a bank and that is a totally different discussion. I personally cannot comprehend why a person doesn't use a bank in this day and age. It makes zero sense.

For many it is not a stance they are taking, it just is not worth it for them to do it. At least that is what they tell me.

Makes no sense to me either though.