Early direct deposit means you can get access to the money you already worked for up to two days faster than the typical process. We all work so that we can get paid to cover our bills and enjoy life a little. This is why it’s essential that you find a bank that offers early direct deposit so that you don’t have to wait to see your money arrive in your bank account.
Here are four banks that offer early direct deposit.
Financial Services that Offer Early Direct Deposit
Wealthfront Cash Account
Wealthfront provides easy ways to upgrade your life with its Cash Account. The early deposit feature ensures that your paychecks arrive up to 48 hours ahead of a typical direct deposit. You can get your early direct deposit because your paycheck may land in your bank account by 6:00 a.m. PST, up to two days before your typical payday. The timing of the direct deposit will ultimately depend on your payroll service at work. If the direct deposit date is on a weekend or bank holiday, it will arrive in your bank account on the next business day.
The rapid deposit allows you to earn more interest on your funds since the money’s in your account for longer.
You can open your Wealthfront Cash Account with as little as $1. The account comes with a free planning tool and tailored advice based on your needs and goals. For instance,
Wealthfront will automate investments on your behalf, so you have one less thing to worry about.
You may use any of Wealthfronts 19,000 free ATMs to access your paycheck.
You can also send mobile payments, make purchases with Google Pay and Apple Pay, and deposit checks on your phone. Best of all, the Cash Account has an APY of 4.55% and zero fees.
If you’re looking for early direct deposit banks, you will want to open an Axos Bank account to stop waiting for your paycheck. The digital bank, formerly known as Bank of Internet USA, has a safe and convenient early direct deposit system. It lets you access your money without delays with the Direct Deposit Express feature. The feature skips the typical hold period, so you don’t have to wait to access your money.
Axos proudly states that your coworkers will get paid later. The bank offers early direct deposit because they pay you as soon as a payment notification is sent, which is up to two days earlier than the standard period.
Axos Bank touts its high levels of security and encryption, and its direct deposits are no exception. Axos Bank’s easy-to-use system helps you get a jumpstart paying your bills while making smart choices with your money.
You can receive your payment promptly when you sign up for early direct deposit at LendingClub Bank. The checking account also comes with above-average interest rates and free ATMs worldwide. You can even earn unlimited cash back with your LedningClub Bank debit card.
LendingClub Bank, formerly known as First Trade Union Bank, is a hybrid bank. It has an online and community focus with only one physical location.
LendingClub Bank opened in 1987 but took off in 2013 thanks to a fintech partnership with LevelUp. Two years later, it partnered with Aspiration to launch its high-yield checking accounts. The strategic unions made LendingClub Bank one of the first institutions to offer early direct deposit, mobile payments, and a rewards app.
Read our full LendingClub Bank Review
Get your paycheck up to two days faster^ than your co-workers when you set up direct deposits with Chime®. The online financial app has quadrupled its profits, thanks to its intuitive direct deposit system.
Many Chimes users are young and middle-class, as opposed to other financial institutions that target affluent customers.
When you sign up for a Chime Checking Account, you get access to Chime’s other services. For instance with Chime SpotMe®, you can overdraft your account up to $200 without a penalty². The substantial user base has made Chime one of the hottest up-and-coming financial apps.
Chime Disclosure - Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC.
1Chime cannot guarantee when files are sent by the IRS and funds can be made available.
^Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
²Chime SpotMe® Disclosure - Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member's Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime's discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won't cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See terms and conditions.
How We Came Up With This List of Early Deposit Banks
Many financial institutions offer early direct deposit but didn’t make our list. Such organizations include Andigo Credit Union, Varo, and Insight. These banks range from traditional brick-and-mortar banks to digital ones. Our goal is to provide you with the best banks that offer early direct deposit and other distinct features you won’t find anywhere else.
The banks we selected center around innovation, convenience, and customer service. They are willing to challenge the status quo by providing better banking services to customers. It’s not a coincidence that many of our selections are digital banks.
Digital banks serve as the new frontier for banking. The low-overhead costs of running an online organization mean that customers get a banking experience that gels with modern technology. Customers don’t have to wait in line for a teller or go to an ATM to make a deposit.
Many digital banks offer more competitive rates than their brick-and-mortar counterparts. These institutions don’t have to pay for physical branch locations. As a byproduct, customers get higher APY and lower fees. Another byproduct of digital banking has been the increase in banks offering early direct deposits so that folks don’t have to wait to access the funds they worked for.
You’re more likely to find a digital bank with early direct deposit than a brick-and-mortar one. There are still a surprising number of global banks that don’t offer the service. They include but are not limited to, PNC, Chase Bank, Citibank, Bank of America, and Wells Fargo.
Pros of Direct Deposit
Nacha performed a survey and found that speed was the number one reason people used direct deposit to get paid from work. Results showed that 53% of users prefer direct deposit for its immediacy, while 47% of people enjoy it because it’s free. Some of the other reasons that users use direct deposit include:
- No risk of losing a physical check
- No holds
Direct deposit also saves you time. Once you link your bank account, you never have to drive to the bank and wait in line to deposit a check again. The automated process lets you spend more time on the important things in life. Early direct deposit is even more beneficial because you get access to your money before the typical payday.
Cons of Direct Deposit
The speedy and straightforward process does have some drawbacks. For instance, 6.5% of American households don’t have a primary bank account, which translates to 14.1 million individuals.
Hispanics and African Americans have disproportionately high levels of being unbanked, with each group hitting double digital rates. The common reason people don’t have bank accounts is a lack of money. Others don’t trust banks or have access to reliable financial institutions.
Some other drawbacks of direct deposits include:
- Backdoor attacks from hackers
- Denial-of-service attacks
- Direct-access attacks
- The fact that changing banks is a hassle
Direct deposit may leave you vulnerable to online attacks. Hackers can exploit databases that have bugs and don’t have authentication to access sensitive information. Make sure to use strong passwords and a password protector to mitigate your risk.
It’s worth noting that these risks are infinitesimally small. You have better odds of getting struck by lightning or winning the lottery than losing your direct deposit to hackers. The Social Security Administration proudly notes that it has successfully delivered every benefits check since accepting direct deposit in 1976.
Related: Is Online Banking Safe?
How Banks Process Your Paycheck Early
To understand how early deposit works, you must know how regular deposits work. While the process appears simple from the outside, it involves a series of intricate interactions between financial institutions. Here are the five core steps involved with getting the money from your employer in your bank account.
- Set Up Direct Deposit - The chain of events starts with you. You let your employer know you want a direct deposit and provide them with information about your bank account. Many companies have direct deposit forms that they give new employees at orientation.
- Send Payment Notice - Your employer will send a payroll notice to its bank before payday. Some people refer to the employer’s bank as the Originating Depository Financial Institution (ODFI). The notice includes your information, such as your routing number and payment amount.
- Forward Payment Information - When your employer’s bank receives the files, they forward them to an Automated Clearing House (ACH) network. ACHs enable bank-to-bank transfers between various financial institutions. They don’t make transfers individually. Instead, they process enormous batches of requests at once.
- Forward Payment Information (Again) - ACHs organize the payment instructions. You don’t want your payment going to someone else’s bank account. They also process this second set of instructions in large batches.
- Process Your Payment - Your bank now has the payment information and can process the payment. Getting to this step requires consistent communication between the banks and the ACH. The entire process takes one to three business days.
Early direct deposit follows the same steps. The difference is a tweak in the fifth step. Instead of processing your payment and depositing the check, it reverses the steps so you can access your funds sooner.
Your bank makes a gesture of good faith that the paycheck will be valid. The bank deposits the money to reward its customers before it finishes processing the payment. This action lets you access money faster than usual. A two-day early direct deposit can make a significant difference when you’re struggling between paychecks or when an emergency situation pops up.
Is early direct deposit right for you?
As long as you have a bank account, it’s an ideal way to receive payments from work or the government. Early direct deposits make your life easier since you don’t have to wait to access the money you already worked for. You get your money on payday without waiting for it to process. Some prominent financial institutions, like Navy Federal Credit Union, have already made it a standard part of their banking services.
Can I get a direct deposit on the weekend?
While you can always find exceptions to the rule, the answer is no — most banks only process payments during business days. If you want to get your direct deposit immediately, you must do it between Monday and Friday, assuming there isn’t a federal holiday between them. Early direct deposits are also impacted by weekends and bank holidays.
What’s the difference between a direct deposit and a wire transfer?
Direct deposits and wire transfers serve the same purpose. They get money from Point A to Point B. Both are forms of electronic money transfer that most banks and credit unions offer as a core service. The difference is that wire transfers typically cost money. The price varies between financial institutions, but you can expect to pay $15 to $50.
Many people use them as a one-time transfer instead of direct deposits or recurring payments. Wire transfers are much faster than your everyday direct deposit. Instead of going through the five-step process mentioned above, the transfer goes between banks. The straightforward process allows your money to arrive in a fraction of the time of other options.
Can direct deposits go into my savings account?
Yes. Direct deposits can go into checking or savings accounts. All you need to do is provide your employer with the proper bank account number. If you want to change your direct deposit location, give your company updated deposit information so that you don’t have any delays in your pay.
What are the alternatives to direct deposit?
The most obvious alternative is a cash or check, but you won’t likely get an early direct deposit this way. The odds are also that both of these options will soon disappear. According to the Times of India, 92% of money exists online, while some employers don’t allow employees to receive physical paychecks.
Another option is PayPal, an online payment platform with millions of users worldwide. It lets you buy, sell, and send money without disclosing your financial information. PayPal even enables you to access funds from a debit card or check.
The problem is that PayPal charges independent contractors for every transaction. Receivers must pay 2.9% and a 30-cent fee for each transfer. If you earn $50,000 per year after taxes, PayPal slashes that number to $48,550. You're paying $1,450 to use PayPal, while direct deposits are free.
Western Union stands out as one of the world's most well-known financial services providers. It opened in 1851 and moved more than $300 billion in 2018 alone. The company also operates in more than 200 countries and handles 130 currencies. It has the same drawbacks as PayPal. You have to pay for a service that many places offer for free. Western Union makes sense if you want superior speed than regular direct deposits.
Signing up for an early direct deposit is a no-brainer. It’s a safe, convenient, and expedient way to get your paycheck earlier with almost no downside.
The real question is: Which one of the banks that offer early direct deposit will you choose?
You can’t go wrong with any of the options on our list if it’s a priority to get paid early with direct deposit. Each financial institution has unique products and services, so you can choose which meets your personal preferences the most.
Resource: Best New Bank Promotions & Offers