The Direct Deposit Handbook

May is the month that NACHA recognizes businesses should celebrate and campaign to get your organization to be 100% direct deposit.  It can be tricky getting past all the employees’ fears and excuses, but there are resources to help you with this.  Remember that all versions of Optimum Solutions payroll applications allow direct deposit and pay card processing.

Direct Deposit Facts

Did you know…

  • 4.4 Billion payments are processed each year
  • Estimated 3 out of 4 payments are direct deposit
  • Currently 98% of U.S. employers offer some kind of direct deposit for their employees
  • Consumer satisfaction with direct deposit is rated at 97%
  • NACHA estimates Direct Deposit is used by more than 100 million people in the U.S.
  • 71% of consumers who have Direct Deposit available to them use it
  • 94% of Federal Government employees receive their pay via Direct Deposit

Employees say No to Direct Deposit because they:

  • Want to hold their check
  • Don’t want spouse to know how much they make
  • Don’t trust banks
  • Don’t have bank accounts
  • Think since their bank is out of town they don’t qualify
  • Think they can’t access money until the day after payday
  • Don’t trust technology

Cost Savings of Direct Deposit

An employer making direct deposits instead of issuing paper checks can save $.50 to $1.25 per payment, plus an employer loses as much as $2.00 per payment for employees leaving to deposit checks. 


  • Paper Check = $.865
  • Direct Deposit = $.513
  • Cost Savings with Direct Deposit = $.352

EE Lost Time

  • Paper Check = $.2.064
  • Direct Deposit = $0.00
  • Cost Savings with Direct Deposit = $2.063

Cost Per Payment

  • Paper Check = $.2.928
  • Direct Deposit = $.513
  • Cost Savings with Direct Deposit = $2.415

Cost per Month

  • Paper Check = $585.60
  • Direct Deposit = $102.60
  • Cost Savings with Direct Deposit = $483.00

Cost Per Year

  • Paper Check = 7027.20
  • Direct Deposit = $1231.20
  • Cost Savings with Direct Deposit = $5796.00

This can translate into a savings up to $1,200 per month for a company with 2,500 employees, or up to $16,200 per month for a company with 30,000 employees.  Also employer benefits include no unclaimed or un-cashed checks.  Since paper checks are not getting cashed, this significantly reduces check reconciliation processes.

Other Direct Deposit Benefits

Knowing exactly when cash hits your employees’ accounts enhances your ability to manage and predict cash flow.  Checks don’t have to be stored in a special secure area, and there are no checks to ever be stolen.  They also never have to be signed.  Many states allow mandatory direct deposit, plus there is a strong new trend for businesses to go paperless.

How to Sell Direct Deposit to the Company

The Electronic Payments website offers free marketing resources for your direct deposit campaign.  These include paycheck stuffers, brochures and radio commercials. is another resource available to businesses; this site gives compliance information as well as information about pay cards for employees who may not have bank accounts.

Employee benefits include not having to cash checks and not failing to collect checks while on vacation or leave. Direct deposit encourages savings for participating employees, especially when you allow deposits to multiple accounts.  The employees’ funds are readily available since there are no holds like there often are on out-of-town checks.

It’s easy for you to sell Direct Deposit to your employees if you educate yourself and your payroll department.  Analyze your payroll system and the demographics of your workforce.  Develop a marketing plan that includes proper communication.  Approach Banks and Credit unions that might offer free checking and lower interest rates on loans for employees with direct deposit.  Most banks will cone to your office and help you with the direct deposit campaign.  Entice your employees by offering prize drawings for direct deposit employees, or announce that direct deposit funds will be available a day earlier than checks.

Once you have convinced your employees to participate in direct deposit, it’s simple to get them signed up by completing authorization forms.  Enter the information into your payroll system and send a test file to your bank.  When everything is set up, your campaign is complete and you and your employees can begin to reap the benefits of direct deposit!

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Payroll Manager Vikki Wicks, Alaska Sales & Service

The payroll / HR / time cards system is very user friendly and support is great!