Your Grandmother Gets Paid Faster Than You with Direct Deposit
Develop Good Financial Habits Early Through Direct Deposit and Direct Payment
(CPWire) April 19, 1999 -- Your grandmother and college students in Canada, Japan and Germany have a big jump on you when it comes to getting paid. That is because they use Direct Deposit, giving them a head start on spending or saving their money.
Statistics show that 70 percent of Social Security recipients receive their benefits through Direct Deposit, and that 95 percent to 100 percent of employees in other industrialized nations use the service. That is a stark contrast to the 46 percent of Americans who save themselves regular hassle by using Direct Deposit.
Direct Deposit, which automatically transfers your paycheck from your employer to your bank account, is the fastest, most convenient way to gain access to your money. So no matter if you are delivering pizzas or pulling the late shift at the local Gas-n-Go, it is worth signing up for Direct Deposit through your employer.
Ken Kurson, editor of Green, a personal finance magazine for people ages 20 to 35, and author of ''The Green Magazine Guide to Personal Finance,'' regularly offers advice to college students about planning their financial future. ''When I travel around the country talking to college students, one of the things I tell them is to sign up for Direct Deposit,'' Kurson said. ''It saves time, it`s safer than a traditional check, and your money shows up in the bank much faster, no matter where you are. Direct Deposit is an important first step toward good financial planning, and it’s easier on the environment.'' Kurson also recommends using Direct Payment, which allows you to pay your bills from your bank account automatically each month. Some companies even offer an incentive to use Direct Payment. For example, many lending institutions, through a program sponsored by the Student Loan Marketing Association (Sallie Mae), reduce their student loan interest rate by a quarter of a percent when the loan will be repaid via Direct Payment.
Introduced 25 years ago, Direct Deposit and Direct Payment have proven to be secure, reliable and convenient. No payment has ever been lost. In fact, you are many times more likely to have a problem with a check than with an automatic payment. And security is not an issue. Few people see an electronic transaction, compared to the many hands a traditional check will pass through.
In addition, Direct Deposit helps you control your finances. You can become a disciplined saver by allocating a portion of your paycheck for savings or other investments such as a mutual fund. With all of Direct Deposit`s advantages, it is no wonder why 97 percent of people who use it say they are very satisfied with it. ''It’s great having the option of choosing where I want my paycheck to go – a checking or savings account, or money market account,'' said Brad Zibung, a senior at the University of Wisconsin in Oshkosh, who began taking advantage of Direct Deposit his freshman year. ''Because the money goes straight into my account I end up spending less and saving more.''
Meanwhile, Direct Payment frees you from the drudgery of monthly bill-paying. Research shows people spend an average of 24 hours per year paying bills. Given the opportunity to spend time paying bills or going to a movie, most people would choose the latter.
Direct Payment also allows you to virtually forget about many of your bills, especially those with fixed amounts, such as rent or mortgage, utilities, insurance and car payments. And, you can relax knowing that your payment is always on time and that you won’t be paying a late fee or hurting your credit rating.
Direct Deposit and Direct Payment simplify your life, while saving you time, money and worries. Pretty smart. Grandma would be proud.
For more information about Direct Deposit and Direct Payment, visit www.directdeposit.org and www.directpayment.org, or call the Direct Deposit and Direct Payment Coalition toll free at 888-737-9444.
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