When to Use Direct Deposit and When to Use a Personal Check

Direct deposit is a convenient alternative to sending and receiving checks in the mail, but it may not be appropriate for every situation. Direct deposit is a type of banking transaction in which you send or deposit money directly into an account. You can make direct deposits into your own accounts or other people’s accounts.

In both cases, you can avoid handling and waiting for paper checks. Deposits are usually completed electronically or automatically and funds become available much sooner than they would if you were to write, mail, and then go to a bank to deposit personal checks instead.

How do you make a direct deposit into someone else’s account?

You can make a direct deposit into another person’s account in several ways:

  • Via personal check. Personal checks are typically the slowest and least convenient way to transfer funds. You must physically deliver the check to the other person, either in person or by mail, and then he or she must deposit the check into their account. There are often further delays while banks wait for the money to clear before making it available to the recipient.
  • Via your bank’s person-to-person money transfer app or online systems. Many banks offer an option within their apps or online access portals that allow you to send money to other people directly. The speed and ease of these transfers varies widely, though transfers generally go through faster if you have transferred money to or from the person in question before and if they use the same bank or financial institution.
  • Via an independent person-to-person money transfer app. There are an abundance of independent person-to-person money transfer apps that allow you to make a bank deposit directly into anyone else’s account. Typically, all you need is for the other person to also be set up with the same app, so that they have a linked account into which you can send the funds. These apps tend to be very timely and convenient, but fees may apply.

How do you make a direct deposit between your own accounts?

The fastest and easiest way to make a direct deposit between your own accounts may depend on the accounts in question.

  • Accounts at the same bank. To transfer funds between two accounts you hold with the same bank or financial institution you may elect to transfer funds online or in person.

To transfer funds in person, simply take your account information and go to your bank’s local branch office. Using deposit or withdrawal slips per your bank’s individual policy, indicate the amount of money you wish to move, which accounts it is to move between, and sign the slip.

To transfer funds online, log into your account in your computer’s browser or via the mobile app. Select the “transfer funds” option and indicate the amount of funds to move and when and where you would like them moved.

  • Accounts at different banks. Some banks allow you to link your accounts at different institutions for easy fund transfers. Usually, you will be required to complete the multi-step linking process before you become eligible to conduct bank deposits this way. Even between linked accounts, these transfers can take more than a week to go through. In some cases, it is faster to write yourself a personal check from one of your accounts and deposit it manually into the other.
  • Checking to savings or vice versa. Savings accounts often have more restrictions on when, where and how you can transfer money out of them. Checking accounts, by contrast, tend to provide numerous options for moving money in and out.

What is a bank deposit slip and a direct deposit card?

A bank deposit slip is a small piece of paper your bank may require you to complete and submit along with a check in order to deposit that check into one of your accounts. Deposit slips may ask for a variety of information, including:

  • Your name.
  • The date.
  • Your account number(s).
  • The total amount to be deposited.
  • If you want any cash back.

You must then sign or endorse the check and give both the check and the deposit slip to the teller. Deposit slips may be included with your checkbook or available at your bank.

In an effort to be more eco-friendly, many banks have begun moving away from bank deposit slips entirely. Digital options and streamlined processes are, in many cases, eliminating the need for such slips.

Direct deposit cards are specialized debit cards that some banks, such as Chase, make available to federal benefits recipients whose funds are direct deposited into their accounts. For example, you may qualify for a direct deposit card if you have Social Security, Disability or Veterans benefits checks deposited into your account.

These cards make it quick and easy for account holders to access their money at any time. They:

  • Eliminate barriers to access such as transportation.
  • Save account holders time, since they no longer need to go to the bank to cash or deposit a check.
  • Save the federal government money on printing and mailing checks.
  • Prevent checks from getting lost or delayed in transit.
  • Save account holders money because they do not need to use ATMs to access their funds.
  • Enable account holders to easily spend their money wherever they like, including online retailers.

Families can request multiple direct deposit cards linked to the same benefits account. This:

  • Increases safety by preventing people from needing to carry cash.
  • Allows families to easily track who is spending money as well as when and where it is being spent.
  • Enables families to split purchasing responsibilities easily.
  • Ensures that spouses and other family members are not cut off from family funds if the primary account holder becomes incapacitated.

Exact terms for these cards can vary, and families are encouraged to review them thoroughly when selecting or receiving a card to ensure they are able to use these cards to their best advantage.