Payment trends have begun to favor digital as new opportunities for cost savings and greater convenience emerge on the market. Employers have many more options for paying their workers in a streamlined fashion, and employees can benefit as well. With faster payments and less potential for fraud or human error to impede the payment process, options such as direct deposits are becoming the standard instead of the exception for businesses all over the world.
For those new to direct deposits in general, the concept may seem clear enough, but how long does a direct deposit take? The time it takes money to actually leave one account and reach a destination account might seem somewhat random. This article explains how long direct deposits take to complete and why they take as long as they do. But first, it may help to have a working understanding of what these types of deposits are and why it might make sense for you to use them yourself.
A direct deposit leverages modern, interconnected banking technology to move funds from one account to another. This form of money transfer effectively serves as a replacement for traditional checks. Checks must be written and signed to be issued and are generally more complex to work with than a direct deposit would be. This is especially true at scale, when large numbers of payments or deposits must be made on a regular basis.
Direct deposits eliminate the need for redundant check writing, simplifying the process of transferring money between accounts by making it more, well, direct. Depositing funds directly into a given account normally requires the recipient’s bank name, account number, and bank routing number. With these pieces of information, a payer can move funds from their own account into the recipient’s. Here are a few more benefits of direct deposit:
As was mentioned above, direct deposits are usually pretty fast—certainly faster than traditional checks. But they’re not necessarily immediate.
From the moment a payer initiates a direct deposit to the moment that deposit reaches the intended account, days can go by. Generally, these deposits take up to three business days to clear. On top of that, a bank holiday is likely to introduce slight delays in this process.
Once funds are directly deposited into a given account, however, the recipient has nearly immediate access to them and can typically use them that same day.
Direct deposit is among the absolute safest methods of transferring funds, and you can count on them to succeed in most circumstances with minimal risks. The Social Security Administration certainly seems to think so: They claim that there has yet to be a single lost payment using direct deposit since 1976. An impressive metric, for sure.
All of that being said, there are a few things that you should try before you complete your next transfer to ensure that it reaches the intended recipient:
Despite the many pros to using direct deposit to manage your company’s payroll and push timely payments out to your employees (or anyone, really), it might not be a perfect option for you. Issues may arise with employees or recipients who don’t qualify to receive direct deposits at their bank. If any of your employees don’t have bank accounts, they won’t be able to receive funds this way either. Thankfully, there are plenty of alternatives, including checks, cash, and payout cards.
Payout cards, in particular, offer a host of unique benefits for your employees that other direct deposit alternatives do not. They are just as fast to use as direct deposits and, in some cases, even faster. Payout cards are also easy to obtain and distribute, plus they’re reusable, further simplifying the process.
Juice for Business gives employers a quick and convenient means of paying workers whether they have bank accounts or not. Juice Payout Cards make automating payroll operations a cinch, all while keeping your Juice for Business gives employers a quick and convenient means of paying workers whether they have bank accounts or not. Juice Payout Cards make automating payroll operations a cinch, all while keeping your employees happy with timely payments. And your employees can access their pay earlier than using most traditional bank accounts. Sign up to Juice for Business and learn more about our payment solutions today.