Direct Deposit--Thoughts?

azzaleaJuly 30, 2012

Okay, let me state from the start, I'm NOT a fan of direct deposit. I much prefer paper checks or, where applicable, cash.

But, at our stage of life, things are changing, and we have no choice but to accept direct deposit for SS, DH's pension. I've switched my annuity to direct deposit, because those checks (only those????) kept getting 'lost in the mail'.

I am curious about others' experiences--good and bad--with direct deposit.

Call me paranoid, but I absolutely won't have my DD payments made to a bank where I do the bulk of my banking. I opened a checking account at a different bank solely for the purpose of accepting our DD. We have no other accounts there, and I keep just enough in that account to keep it open. As soon as our DD's come in, I write a check and transfer them to the 'other' bank.

Why? My aunt had her pension checks direct deposited. When she died, I called the pension company immediately, told them she died and the date. The idiot clerk I talked to put the previous year's date (it was January) on the form. A few weeks later, I got a bank statement and to my surprise found that the pension company had--without my knowlege or consent--reached into her account and taken out many thousands of $$$. When you give an agency the right to put money INTO your account, you apparently also give them the right to take money OUT of it. This was purely a mistake on the part of the pension company, but it was a HUGE hassle to sort out, and took me a couple of months before all the money was back where it belonged!!! At that point in time, dealing with my aunt's death, planning her funeral and memorial service, clearing out her apt, etc, I really didn't need the extra headache. Luckily, no checks I'd written bounced. Anyway, that's what's behind my thinking for keeping DD away from the bulk of our savings--I'm hoping, this way, if there ever is a question, they'd have to come to me, rather than just helping themselves to my money without telling me.

I totally acknowledge that I'm being super cautious--perhaps a bit over the top so--but it's the only way I can think of to try to keep one of the half dozen or so companies who now have access to my bank account, from helping themselves to my money, without contacting me first.

So--who's satisfied with DD? who's had problems? how did you solve them?

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I've had direct deposit since 1991. One of the first at my place of employment to sign up. I currently have my SS check, my DH's SS check and 3 other pensions deposited each month. Never an issue. I haven't been inside a bank (actually, mine is a credit union) in years except to buy my grandkids VISA gift cards for birthdays or other gift occasions. Even if someone gives me a paper check for something, I deposit it via cell phone or computer, and send them the actual check via postage paid envelope.

    Bookmark   July 30, 2012 at 4:06PM
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I don't get SS checks, but I do have my paychecks direct deposited (and have for about 5 years). I have had absolutely no problems with the process. Of course, although payday is on a Monday, the DD doesn't show up until Wednesday evening. So I've just adjusted my thinking to know that payday is actually Wednesday. I also have several autopays that come out of that same account, and no problems there either.

    Bookmark   July 30, 2012 at 4:08PM
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I don't get SS either - but I love direct deposit. I pay nearly all my bills online. I have auto-pay on quite few things also.

I like the fact that I can check my accounts whenever I want and make payments immediately. I can also see if anything is going wrong with the bank statement or CC statement right away.

    Bookmark   July 30, 2012 at 4:13PM
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I've used DD for SS and my pension for over 10 years.
A lot safer than the mailbox in front of the house, down at the curb.

    Bookmark   July 30, 2012 at 4:23PM
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teacher retirement and social security are direct deposits with no problem

    Bookmark   July 30, 2012 at 4:36PM
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I use it. For me, the convenience far outweighs the tiny possibility that something bad might happen. Plenty of headaches can occur with paper checks too. They can get lost, or damaged or stolen or deposited into the wrong account or any variety of things.

I believe in taking reasonable precautions but life is too short to inconvenience yourself and to stress about things that probably won't ever happen.

    Bookmark   July 30, 2012 at 4:46PM
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I started having my paychecks direct deposited more than 30 years ago. In that time, there was one time (in the mid 1980's) that all paychecks for our department were late by 2 days. Our banks were notified so no checks were bounced. That is the only time I have ever had any problem with direct deposit. I love the convenience, and I seldom go the bank.

I also love the convenience of paying bills online!

    Bookmark   July 30, 2012 at 4:47PM
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I've used direct deposit in the private sector since 1983 without any issue. My paycheck shows up at midnight on payday. Never been late. Actually, one company deposited pay on Thursday instead of Friday if you had direct deposit. Processing varies by company and financial institution. When I was in the military, my pay was directly deposited into my account. No issues there either. A total of 33 years with electronic deposit of funds with no issue. May be a record???? :)

You have to know mistakes are made and there's nothing you can do to prevent it. I'm sorry you had to experience something like that.

It sounds like you've found a routine you're comfortable with; if so, stick with it. I don't believe it's necessary but I understand your level of caution.

    Bookmark   July 30, 2012 at 4:53PM
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ravencajun Zone 8b TX

I truly don't understand how the bank allowed them to remove any funds from her account with out notifying her or whoever was listed on the account. I have never heard of such a thing I think I would have had a talk with them and moved the money. No one should have the ability or authority to touch your money in a secure bank account. If an over payment was suspected all parties involved should have been notified and the method of correction reached.

We do have direct deposit for my husband's wages he preferred paper check and him going to the bank, he likes being somewhat familiar with the banking employees, his business users that same bank so that is why, and he always got his pocket cash when making the deposit now he keeps running out of cash and taking mine lol.

    Bookmark   July 30, 2012 at 4:59PM
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My husband has never received a paper check from his workplace... so he has had direct deposit since 1983.

Not one single problem... ever.

    Bookmark   July 30, 2012 at 5:05PM
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My wages when I worked for the bank were direct deposit and the same for Elections Canada and Elections Ontario.I never had any problems.

Revenue Canada wants us to use direct deposit for our income tax refunds and various quarterly and now monthly tax rebates but I prefer to get those cheques by mail because I can hang onto them until I need the money. I like to use these cheques to buy something I really want because if it goes into my account directly I will spend it faster on groceries, or things I don't need.

What a mess that must have been to fix after the pension was clawed back. The day after my Mom died I had informed the US Social Security people that she had passed away yet they still kept putting SS into her account for a few months. That was mess to clean up too. I had to send a copy of the will to them.

I wouldn't hesitate to use direct deposit for other payments but don't for the tax rebates for the reasons I stated.


    Bookmark   July 30, 2012 at 5:17PM
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Had DD with both of my checks for the last 10 years and hubbys for the past 2 years. Love it and have had no problems.

    Bookmark   July 30, 2012 at 5:20PM
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It's good to hear so many positive stories about direct deposit.

Raven, I don't know how it works, but apparently it's perfectly within the rules for someone to grab money from an account if they 'think' a mistake's been made. Changing banks at that point isn't an option, either, because when a 'sideways' (aunt, nephew, etc) relative dies, the bank accounts are frozen (at least for the administrator of the estate) so I wasn't able to do anything like changing banks. Besides, the bank was very helpful when I had to sort the mess out--it wasn't their fault, and they did everything they could to help me.

As to paper checks being lost/stolen, etc? I've had that happen, and it's so much easier and faster to get that rectified and get a new check than to try to get money BACK that's been taken from a DD account. Given a choice, I'd have everything done by paper--it's just not possible these days. Call me a dinosauer--LOL!

    Bookmark   July 30, 2012 at 5:52PM
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There is implied consent with banks/providers of DD that if an error is made, the originator can submit for a return of erroneously deposited money. In azzalea's aunt's case, the pension provider wrote the wrong year of death on their internal paperwork and that paper trail continued through processing, resulting in an expected return of money the provider thought they were owed. Someone at the provider apparently did not QC their work and compare death date to the death certificate. While it did get resolved, resolution generally takes time because the provider wants to make sure they don't release money and then have to go back for it's a P.I.T.A.!!!

The Social Security Administration will do the same thing if a recipient dies and they feel payment should be returned. It happens most when someone passes away late in the month and the next payment has already been processed through the system. The SSA makes a correcting entry and the recipient bank would send the $$ back without contacting the account holder.

It happens all the time, as do mistakes in the process. So, the obvious solution is.....don't die!!! :)

Don't ask how I know so much about the process.....I've worked in Benefits Administration for 30 years and also worked in the financial industry. I simply know too much.

    Bookmark   July 30, 2012 at 6:06PM
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We have been direct depositing funds forever, I think. The first time we went overseas...maybe '58, we had deposits made to our bank instead of sent to us in foreign places....and it has served us well for all these years. Retirement pay from the government since '77; never have seen a check. And it continues. DH also liked to take his pay to the bank at his last job...just liked to "talk to the ladies" in our small town. He still likes to enter the bank for any reason, just to check the place and people out. He misses having 'the ladies' (like his former clerks and secretaries) to talk to.

    Bookmark   July 30, 2012 at 6:12PM
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WalnutCreek Zone 7b/8a

Direct deposit here since it first became available, I think it was in the mid-1970s. I do all of my banking on-line, use a debit card, and have to write a paper check rarely. Never any problems.

    Bookmark   July 30, 2012 at 6:18PM
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We've had DD for years and years and never had any problem. We are in our 70's now.

    Bookmark   July 30, 2012 at 6:23PM
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we'd love to go back to direct deposit but dh's office won't for some reason, sigh...i HATE having a paycheck in the house even overnight!

dh's one pension check is direct...never had a problem...

    Bookmark   July 30, 2012 at 6:28PM
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Another fan of DD here. DH's pay is DD into our account and shows up shortly after midnight on payday. No problems in over 10 years.

    Bookmark   July 30, 2012 at 6:49PM
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DH has had it on his SS for 15 years, me for two, no problems at all.

    Bookmark   July 30, 2012 at 7:01PM
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My paycheck is direct deposited, and I like that I have access to the money at the beginning of the day on payday. Funds are available at the opening of business.

    Bookmark   July 30, 2012 at 7:14PM
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I have used it for years for my pension and for Soc Sec and now tax refunds. I pay bills by auto draft direct from my checking account. I love all of it. I only have to write checks for insurance, service calls and my Visa.

    Bookmark   July 30, 2012 at 7:45PM
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Personally, I think you're on the paranoid side of reason on this one. You've had one bad experience (and I know any bad experience is BAD).

I've had paychecks from many employers for both me and the DH, and now his SS and pension checks, direct deposited for over 30 years. Not one thing has happened. No delays, no one trying to access our account - not one thing.

When that clerk entered the wrong year, it probably initiated a fraud investigation. So, while not your fault, I understand why they might freeze the account until the issue was cleared up.

    Bookmark   July 30, 2012 at 8:14PM
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Always had my paychecks DD'd, never a problem. You are not giving them permission to take money out of your account and if some "one" did that, the bank should be held liable.

    Bookmark   July 30, 2012 at 8:32PM
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Mary, no--you misunderstood. The pension company didn't freeze the account, they just reached their hand in and took out about $10,000. The STATE freezes the account when the deceased is not a direct relative of the heirs--in this case--aunt died, her heirs were nieces and nephews (a sideways relationship) so there was tax due on the estate. Until the tax is paid, and the state releases waivers, most of the money/accounts are frozen--you're only allowed to access enough to pay bills and funeral expenses, but I wouldn't have been able to close out any accounts to move banks.

Hey, I admitted right from the start, that I was being over-cautious, because of my first experience with direct deposit. It's not that big a deal--the banks are a couple of blocks from each other, neither is far from our house, both are on the way to the Amish Market (we go there at least once a week) so it's not a big deal. And my DH is like someone else who posted--he loves popping into the bank to 'visit'.

    Bookmark   July 30, 2012 at 8:44PM
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I have had my paychecks DD for over 30 years and never had a problem. My SS and pension checks are also DD. I rarely write a check because I have all payments made direct from my bank. I also use a debit card.
Before the days of DD, I took my paycheck to the bank and it was deposited into someone else's account. Several of my checks bounced. I made sure my bank sent letters to my creditors explaining it was their error. They also sent me carbon copies of those letters.

    Bookmark   July 30, 2012 at 9:28PM
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The STATE freezes the account when the deceased is not a direct relative of the heirs--in this case--aunt died, her heirs were nieces and nephews (a sideways relationship) so there was tax due on the estate. Until the tax is paid, and the state releases waivers, most of the money/accounts are frozen--you're only allowed to access enough to pay bills and funeral expenses, but I wouldn't have been able to close out any accounts to move banks.

So if your heirs are direct relatives, why are you using two banks? And if the sideways heirs can access the money to pay bills and funeral expenses, it's not such a big issue. Of the many things one needs to be cautious about in life, this doesn't seem to be one of them. The worst that is going to happen is a minor financial hiccup.

    Bookmark   July 30, 2012 at 9:28PM
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My paychecks have been direct deposit for many years with no problems, SS too.

    Bookmark   July 30, 2012 at 10:21PM
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We have had DD for all of our income for many years. We haven't had any problems and it's SO easy.

    Bookmark   July 30, 2012 at 10:32PM
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I think it is a lot safer than having your checks left in a mail box outside your home. Thieves know what day check come in.

    Bookmark   July 30, 2012 at 10:39PM
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Again, I'm glad to hear so many positive stories. Hoping things will go as well for us.

Emma--for the past 39 years, we've had a house with a mail slot in the door--when the mail was delivered, it was always inside the house, not accessible to anyone on the outside (and I'm usually home, and we keep the front door locked). Now that we've moved to the country, I got a deep mailbox that locks. It's impossible to reach in from the top (where the mail is deposited) and reach all the way to the bottom where the mail sits--you have to have the key to open the bottom of the box to get to the mail. Since we weren't living here for the first 4 years we had the house, it made sense to get a secure mailbox--Dsis, the mailman, said the one we got was very safe. I've had checks sit in there for days, without worrying about them, before we actually moved here fulltime.

    Bookmark   July 30, 2012 at 11:06PM
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We use 2 CU's and DH's SS is DD in one, where he maintains a checking and savings account. And spends the $ anyway he wants.
Plus in "my" CU we have DD on my SS and 3 pensions. I pay all the bills and get the rest.
Both of us maintain savings accounts and split the cost of our Florida rental.
It works for us!
Never had a problem with DD. And I can go online after midnight and usually the money is there shortly after midnight! Don't use automatic bill pay. Would rather do that myself online.
We both have debit cards and can get cash in a hurry if needed.
Also a credit card for paying for gas and hotel bills. Don't trust everyone with my debit card!

    Bookmark   July 31, 2012 at 10:19AM
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I worked for Social Security for many years, since "before" direct deposit. In the old days, all SS checks were printed, mailed and then delivered on the third of the month. Thieves knew this and a great many checks were stolen from outdoor mailboxes. Replacing a lost or stolen check took as long as 2 weeks. Since direct deposit came out, I never ever saw a check missing from a bank. I believe direct deposit of SS checks is now mandatory, new beneficiaries don't even have the option of paper checks anymore. My Mom absolutely refused to sign up for direct deposit. She never had a check stolen, she just liked "seeing" it arrive and looking at it to make sure it was the right amount. She then had to drive to a bank to cash it.

    Bookmark   July 31, 2012 at 11:47AM
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I love direct deposit. My paychecks have been DD for years, I can't remember the last time I received a paper check. My check has always been there at midnight, on payday, without fail. I only have one bank acct., so I use the same for everything.

I pay all my bills online/through my bank too. The only check I ever write anymore is my rent check and occasionally a medical bill.

    Bookmark   July 31, 2012 at 3:36PM
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