If you’ve ever had to wait for your paycheck to clear, you know that it’s a painful process. It can take several days for your employer’s bank—or, more likely, payroll processor—to post your direct deposit into your account and even longer if there’s an issue with the check you receive. But what if there was a way to speed up that process? Well, there is: It’s called an early direct deposit. With companies such as SoFi, you can get a direct deposit 2 days early. Read on to learn more.
What Is an Early Direct Deposit?
An early direct deposit is a payment from your employer that you receive electronically before the date on which it’s scheduled to be paid into your account. Early direct deposits are not processed by you or your bank; instead, they’re typically initiated and processed by the company or agency where you work.
Because these emails are sent as files rather than text messages, they contain additional information about the payee (and other details) that can’t be displayed with standard email software like Gmail or Outlook.
Pros of Early Direct Deposits
- Early direct deposits are a boon if you need to access your money faster. If you’re expecting a paycheck, an early direct deposit gives you an extra few days’ notice of when that cash will hit your account.
- Early direct deposits can save on bank fees and overdraft charges, too. Many banks charge fees for checking accounts with low balances or that have been overdrawn in the past—especially if they offer no-fee checking accounts.
- With earlier access to funds and fewer fees, it’s easier to budget better because you know how much money will come in each week or month at any given time rather than waiting until after the fact when all checks have cleared before knowing how much money is available at any given moment.
Cons of Early Direct Deposits
Unlike a credit union, which allows you to make electronic deposits 24 hours a day, the rules of early direct deposit mean that your money won’t be available until the next business day. This means that if you need cash right away and can’t wait until tomorrow—or if you need to pay bills or buy groceries—you may have to go through another method of payment.
A second drawback is that some banks charge fees for using this service (although these fees tend not to be too large). Some banks also require minimum amounts on deposits as part of their terms; if this is an issue for you, look into what other options are available at your bank before deciding whether an early direct deposit is worthwhile for your needs.
Alternative Ways to Access Your Money Faster
If you have to wait longer than a couple of days to access your money, there are ways to get access sooner.
- Use a debit card. This is the fastest way for most people to get cash from an ATM or make purchases with their checking accounts.
- Set up automatic transfers from your checking account into savings or other accounts in order to build up an emergency fund. To do this, log into online banking and look under “withdrawals” or “transfers.”
- Use electronic bill pay through your bank’s website if it offers that option; otherwise, you can use online bill payment services.
There are many benefits to having early direct deposits, including the fact that you won’t have to worry about missing important payments. If you want your bank account to be able to do this, then it makes sense for you to consider a different one.