January 11, 2022

Can You Direct Deposit Into a Savings Account


Learn whether you can direct deposit into your savings account, the benefits of direct deposit, and how to sign up.

You can set up direct deposit to go to your savings account.

But should you?

Find out the surprising reasons why it may be a good idea, how to set it up, and more in this guide.

Can You Direct Deposit into a Savings Account?

Quick answer: Yes.

While most people forward their entire paycheck to a checking account, there is no legal requirement or workplace regulation to do so.

You have the choice to deposit all, or a portion of, your paycheck deposited into a savings account if you wish. Maybe people even choose to split the paycheck between a savings and checking account.

Now that you know you can direct deposit into your savings, let's take a look at whether you should.

Can you direct deposit to cash app?
Yes. You can set up direct deposit into your Cash App account for up to $25,000 per individual deposit and up to $50,000 in a single day. [1]

Should You Direct Deposit into a Savings Account?

Traditionally, your checking account acts like the central train station between your bank accounts.

Money comes inbound to your checking account in the form of paychecks and other income — and money goes outbound from your checking account to use for expenses like bills and spending money.

3 Reasons to Direct Deposit into a Savings Account

There are some good reasons to consider sending part of your paycheck into a savings account.

  1. Automate savings and eliminate the need to transfer money between accounts
  2. Savings earn interest, while your checking account (most likely) does not
  3. May incentivize savings because you won't see your full paycheck as "spending money" each month

Before determining how much money to deposit into your savings account, make a budget to ensure you will still have enough money in your checking account to cover all necessary expenses.

Need a Budget? Consider the 50/30/20 Method to get your finances in shape.

Another smart reason to send a direct deposit into a savings account is if you have a second job or side hustle for the specific purpose of saving more money while your primary job pays for all your expenses.

In this case, it makes sense to send your entire paycheck from the second job into your savings account.

How to Direct Deposit into a Savings Account

To adjust or set up a direct deposit into your savings account, follow these steps:

  1. First, notify your payroll department
    First, tell your boss, payroll manager, or whoever handles your payroll information that you would like to amend your direct deposit to include your savings account. Request a direct deposit enrollment form.

  2. Then, fill out the direct deposit enrollment form
    Next, fill out the form. You will need to include your name, Social Security number, signature, and date. You will also designate the bank name(s), account type(s), account number(s), routing number, and the amount you would like deposited into each account.

  3. Finally, submit the form
    Last, submit this form to your payroll manager. Note that it may take one pay period for your new direct deposit information to process, so the changes may not be reflected on your next paycheck.

Will my checking and savings routing numbers be the same?
If both accounts are with the same bank, the routing numbers are likely the same. Routing numbers identify the banking institution, while account numbers identify a specific account. However, some large banks have multiple routing numbers, so it's best to double-check.

What is Direct Deposit?

Direct deposit refers to the automatic electronic transfer of funds from a sender directly into a recipient's bank account.

It's usually used for workplace payroll, but can be used for other payments as well, such as your annual tax return.

Direct deposit allows you to get paid and use funds faster. In the old days, an employer would give you a paper check on payday. Then, you'd have to manually deposit into your bank account by visiting a branch.

With direct deposit, your employer's bank and your bank communicate directly through a network called the automated clearing house (ACH) so that you get paid in the early morning on payday (and in some cases, up to two days before payday).

Direct deposit also reduces potential human error because there are fewer forms, deposit slips, and person-to-person interactions taking place.

Why You Should Participate in Direct Deposit

Still using paper checks to get paid? There are many reasons why it is beneficial to participate in your workplace's direct deposit program, including:

  1. Speed
    As mentioned above, direct deposit is much faster than the alternative — and who doesn't want to get paid faster?

    What time do direct deposits post?
    Usually very early in the morning on the date of payment. For example, Chase direct deposits go through between 3AM and 5AM, Bank of America between 4AM and 6AM, and Wells Fargo between 12AM and 3AM.[2]

  2. Convenience
    Cashing checks requires a lot of time and effort. Traveling to the bank, standing in line, filling out a deposit slip … you get the picture. Eliminate the hassle with direct deposit.

  3. Security
    Direct deposit eliminates the risk of a check being lost in the mail, stolen, or cashed by a thief. Digital payments are also encrypted.

  4. Reduced Waste
    Since neither you nor your employer needs to print or file paper documents like paystubs, you can help cut down on clutter and waste by signing up for direct deposit.

The Bottom Line

Yes, you can direct deposit your paycheck into a savings account. It is recommended to only deposit part of your pay into savings while sending the majority to your checking account to use for necessary expenses.

If you would like to make direct deposits into your savings account, speak with your payroll manager to learn the specific steps you need to follow at your workplace.

References

Write to Justin Barnard at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Read Next:

What is Direct Deposit?

What is Direct Deposit

Bank Promotions without Direct Deposit

Bank Promotions without Direct Deposit

Checking vs Savings Account

Checking vs Savings Account

Can You Cash a Check at Any Bank

Cash Check at Any Bank

Best Free Checking Accounts

Best Free Checking Accounts

Why Have Two Checking Accounts

Why Two Checking Accounts


Savings Account Promotions

February 6, 2019 - Reviews for Bank Promotions
View list of best savings promos and bonus offers for new accounts. Look for cash bonuses and high interest rates.
Leave a comment about Can You Direct Deposit Into a Savings Account?



Best Cash Management Accounts

Cash Management Accounts

Cash management accounts combine the features of savings, checking, and investment account. Compare the best cash management accounts in this guide.
More Articles in Bank Reviews & Deals

About CreditDonkey
CreditDonkey is a bank comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

About Us | Reviews | Deals | Tips | Privacy | Do Not Sell My Info | Terms | Contact Us
(888) 483-4925 | 680 East Colorado Blvd, 2nd Floor | Pasadena, CA 91101
© 2022 CreditDonkey Inc. All Rights Reserved.