Direct Deposit To Checking Or Savings? Which Is Better?

By Zach Buchenau

Last Updated: July 22, 2020

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Should I direct deposit to checking or savings? | Be The Budget

If you have a job, one of the fastest and most convenient ways to receive your paycheck is through direct deposit. It shortens the timeline until the money becomes accessible in your bank account, and eliminates the need for you to drive to the bank and deposit your new funds.

But here’s the thing, in order to receive your paycheck through direct deposit, you have to determine where you would like the money to be deposited. And if you have both a savings and a checking account, it can be hard to decide between the two. And that’s exactly why I’m writing this post. In fact, before we get too much further, allow me to answer your underlying question: should I direct deposit into checking or savings?

In general, you should set up your direct deposit to go into your checking account. Since savings accounts are limited to six convenient transfers per month, it is better to have your money deposited into checking and then immediately transfer a portion of it into savings.

That said, if your employer allows you to split your direct deposit between multiple accounts, it may make sense to have a portion of it go into your savings account. This can be a great way to automate your savings, and help you stay on track for your financial goals.

Now, when it comes to direct deposit, there are a few more things you should know. So, for the rest of this article, I’m going to dive a little deeper and answer a few more questions you might have.

Let’s jump in!

How Do You Set Up Direct Deposit?

If you are just starting a new job, or you just want to start receiving your paycheck by way of direct deposit, then there are a few things you will need to provide.

To set up direct deposit, you likely need to fill out a direct deposit form with your bank account number, routing number. Additionally, certain companies will require you to provide a voided check so they can confirm the information.

This is another reason why setting up your direct deposit to go into your checking account is a little easier than your savings account.

Now, if you would like to split your paycheck between multiple accounts, be sure to ask your employer if that is a possibility. You may or may not have the option, but if it is offered, you will also need to provide your employer with your savings account information, and how much of your paycheck you would like to go into savings.

As I mentioned before, if your employer offers this option, it can be a great way to automate your savings. Though, it may be something for which you have to ask.

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3 Benefits Of Direct Deposit

By this point, if you are still a little apprehensive about setting up direct deposit, then there are a few benefits you should consider.

1. Convenience

If you are receiving your paycheck through the mail, then that means you have to wait for it to arrive, and when it does, drive to the bank and deposit it into your bank account. Now, this isn’t some major inconvenience, but it is definitely less convenient than direct deposit. I mean, with direct deposit, you just wake up and the money is in your account. It’s hard to get more convenient than that.

2. Speed

The speed of direct deposit is really nice. As opposed to waiting a few days for your check to arrive in the mail, direct deposit shows up much quickier. I know when I receive direct deposit, it is typically in my bank account before I even wake up on pay day.

3. Security

When you opt to receive your paycheck through the mail, there is a lot that can go wrong. First of all, your money could get mixed up in the mail and go to the wrong address. I don’t know about you, but waiting for a paycheck that never arrives is quite the bummer. Second of all, when your paycheck is sent through the mail, albeit rare, it is more likely to get stolen along the way. On the other hand, if you set up direct deposit, your money goes directly into your bank account, where it is password protected and insured against theft and fraud. To me, that’s a no-brainer.

How Long Does Direct Deposit Take?

Direct deposit can take anywhere from a few hours to a few days to enter your bank account. However, once the money enters your account, it can take another day or two for the funds to become available.

To be honest, in my experience, the money I receive through direct deposit shows up in my bank account before I even wake up on pay day. However, depending on where you bank, yours may take a bit longer.

On That Note: Here at Be The Budget, we know how frustrating it can be to wait for a direct deposit to become available. That’s why we are proud affiliates of, and highly recommend opening an Essential Checking Account with Axos Bank. With their Direct Deposit Express feature, you can get paid up to 2 days earlier than most traditional checking accounts allow. Plus, with no minimum balance fees, no monthly maintenance fees, no overdraft fees, and unlimited domestic ATM fee reimbursements, we think this checking account is the bee’s knees!

Learn More About An Axos Essential Checking Account

Can I Split My Direct Deposit Into Two Accounts?

Yes, in many cases, employers will allow you to split your direct deposit between multiple accounts. So, you can have a portion of your paycheck go into your savings account, and the rest deposited into checking. If you are a person that struggles to save money, this can be a great way to automate your savings.

Can I Split My Direct Deposit Between Two Banks?

In most cases, yes you can split your direct deposit between two banks. To do so, all you will have to do is provide your employer with the account and routing number for each account, as well as the respective account types.

Truthfully, since you have to provide the account and routing number for every account you choose to use for direct deposit, splitting your paycheck between multiple banks isn’t much different than splitting it between separate accounts at the same bank.

Does It Ever Make Sense To Direct Deposit Into Savings?

There are certain situations where setting up direct deposit to go into your savings account is a great idea. For example, if you are working a second job in order to build up additional savings, it may be in your best interest to have the money deposited directly into savings. That way, you won’t be tempted to spend any of it, and will therefore achieve your goal as fast as possible.

Remember, there is a reason we call it personal finance — it is personal. So, if you feel like you are better off having your direct deposit go into your savings account, then that is up to you. Ultimately, you need to do your research, and determine what’s best for you.

I just hope this article has equipped you with enough information to help you make the best decision possible.

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Direct Deposit: Checking or Savings? | Be The Budget

Direct Deposit To Checking Or Savings | Be The Budget

Zach Buchenau

About The Author:

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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