Direct Deposit: Benefits and Advantages / By: Comar'I Brown
Many teens will be searching and applying for jobs this summer. During employment, consider receiving your payments through direct deposit—it is convenient and also supports healthy saving habits. Direct deposit is more time-efficient and eliminates check-cashing fees. “Now with the pandemic, it’s almost impossible and unsafe to go to the bank [or currency exchanges], and having direct deposit is certainly a convenient method that saves a lot of time,” said Yale University Student Grace Baghdadi. Direct deposit can help maximize the amount of money you receive from your paychecks as well. “Unbanked customers who don’t use … direct deposit pay an average of $182.03 per year just to access their money” ( Nerd Wallet 2015). Direct deposit eliminates financial hassles that can help save you a lot of time and energy. Additionally, by having your funds deposited into a bank account you become less likely to spend. In 2019, it was reported that “ 35% of all in-person payments were made with cash, while debit cards accounted for [only] 32% ” ( Balancing Everything 2021). “Direct deposit reduces the feeling of wanting to celebrate because I have a paycheck,” claimed Kathryn Person, Microeconomics Teacher at Walter Payton College Prep. Overall, direct deposit encourages healthy saving habits. Person elaborated on a phenomenon within behavioral economics where individuals act irrationally when it comes to managing money, as people perceive their physical cash to be money to treat themselves rather than money to achieve long-term goals. Other Special Perks of Direct Deposit: Get paid 1-2 days earlier! Be Safe! No lost/stolen checks in the mail! Track your spending and expenses through your bank account. Deposit a portion of your check into your savings account for free. Gain interest on your savings account (Get paid to save!) Ultimately, direct deposit is the most efficient form of payment as it helps maximize the amount of money taken home from each paycheck while also strengthening money management skills. So when it’s time to work this summer, be sure to ask your employer about the steps to enroll in direct deposit fast!