Direct deposit (redirected from Automatic Deposit)
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A method of payment which electronically credits your checking or savings account.
An electronic service in which a payment
, especially but not limited to a paycheck, pension
, or tax refund
, is transferred immediately into the recipient's bank account
. The direct deposit replaces a check
for which the recipient would otherwise have to wait to arrive in the mail. A direct deposit service also allows the recipient to have access to his/her funds
immediately without waiting on the holding period
, which is required for many check deposits
Direct deposit is the electronic transfer of money from a payer, such as your employer or a government agency, directly into a bank account you designate.
Direct deposit is faster and cheaper than sending a check and also more secure, which is why both payers and banks prefer this system. In fact, banks often provide free checking or other benefits if your paychecks are deposited directly.