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Are you looking for banks that offer early direct deposit?
In this article, I am going to walk you through all the banks that offer early direct deposit as well as other alternative ways to help you get paid much earlier.
What Is Early Direct Deposit?
To understand what is early direct deposit, you first need to understand what is direct deposit.
Direct deposit is a payment option where your pay is electronically transferred to your bank account by your employer.
It’s a much faster way than getting paid by cheque because you have to wait for the cheque to be mailed to your house, then you have to deposit your paycheque at your bank and then wait for a few days for your bank to clear the cheque.
So, if your employer offers direct deposit as an option to receive your salary, you should definitely opt for it.
Generally, to set up direct deposit, all you need to provide your employer is the following information:
- Your bank name
- Your bank account number
Once direct deposit is set up, you will automatically receive your salary in your bank account on your payday.
Now, what is early direct deposit?
Early direct deposit simply means that you can get paid up to 2 days earlier than your actual payday.
There are quite a few banks that offer early direct deposit.
So, how do banks actually offer early direct deposit?
To know that, let’s first find out how early direct deposit works.
How Does Early Direct Deposit Work?
Before that, you need to know how direct deposit works.
There are basically three parties involved:
- Your employer’s banks
- ACH Operator (i.e. automated clearinghouse system operator such as Federal Reserve)
- Your bank
Generally, a few days before your payday, your employer sends fund transfer instructions to its bank to pay you on your payday.
These fund transfer instructions are essentially data files containing your bank information, your bank account number and the amount to transfer.
Once your employer’s bank has received the files, it will send these files to ACH operator.
Who is ACH operator?
And what does it do?
ACH operator acts as the settlement agent between banks.
Federal Reserve is a national ACH operator.
Every day, there are millions of fund transfers taking place between banks.
For example, your employer sends your salary from its bank to your bank account.
Social Security Administration sends your social security benefits from its bank to your bank account.
You pay utility bills from your bank account to the utility company’s bank account.
These payments are sorted and settled by an ACH operator who makes sure that everything is done correctly according to the fund transfer instructions.
So, once the ACH operator has processed these files, and then it sends the files to your bank.
As ACH operator handles massive amounts of data, it will usually take at least 1 to 2 business days to finish processing.
Once your bank receives the files from ACH operator, your bank will start processing it, which usually takes at least 1 to 2 business days.
So, how early direct deposit works is that your bank will make your money available to you as soon as it receives the files from the ACH.
That’s before your bank starts processing the files to confirm that funds have been taken out of your employer’s banks and sent to your bank.
Generally, your bank should first make sure that there are enough funds in your employer’s bank account before making the money available to you in your account.
So, by offering early direct deposit, your bank is actually acting on good faith that your employer has sufficient funds for a successful fund transfer.
What Banks Direct Deposit Early?
Axos Bank (Recommended)
Axos Bank offers Essential Checking Account with early direct deposit.
With its Direct Deposit Express, you can get paid up to two days early.
It’s simple, fast, and free of charge.
Best of all, Axos Bank’s Essential Checking account also charges no overdraft fee or no monthly maintenance fee.
There is also no minimum monthly balance requirements.
Below is a list of all the other useful features it also offers:
- Mobile Banking ( Available for iPhone and Android)
- Free Mobile Deposit (i.e. it allows you to deposit checks anytime and anywhere)
- Online Bill Pay
- No-Hassle Switching from your current bank
Also, Axos Bank takes security very seriously.
That’s why it uses 128-bit Secure Socket Layer (SSL) encryption to ensure your data remains private and secure.
Lastly, all deposit accounts through Axos Bank brands are FDIC insured to at least $250,000 .
Visit Axos Bank & Get Early Direct Deposit Now
Chime is another bank that also offers early direct deposit.
It gives you your paycheck as soon as it’s notified by the Federal Reserve that payroll has been submitted.
Therefore, your early direct deposit can be available in your account often two days earlier than most traditional banks.
How do you sign up for early direct deposit with Chime?
All you need to do is first open an online Chime banking account.
Once you are done, just log into your Chime app, select Move Money, and tap Direct Deposit.
Then, it will email you a pre-filled direct deposit form that you can hand over to your employer.
There are no hidden fees and over 38,000 fee-free ATMs.
Varo Mobile Checking
Varo is a mobile-only digital bank based in San Francisco, California.
It has no physical banking offices.
And it offers financial services such as checking accounts and saving accounts exclusively through its mobile app.
Varo currently also offers early direct deposit through its bank accounts.
All you need to do is open a Varo bank account online and provide your Varo Bank Account information to your employer for salary crediting.
With Varo Bank Account, you have no overdraft fees, no monthly fees, and no minimum balance.
You can also instantly send money to anyone who uses Varo.
Does it charge any other fees?
Yes, there is one fee that Varo does charge which is when you use an out-of-network ATM
Is your money safe with Varo?
All the deposits are FDIC insured to at least $250,000 through The Bancorp Bank.
Best Alternative To Get Paid Instantly For The Hours You Worked
Earnin app is one of the most awesome apps I’ve discovered recently.
So, how does Earnin help you get paid much earlier than early direct deposit?
With Earnin, you get paid instantly for the hours you’ve already worked.
In other words, instant paychecks are made possible by Earnin.
No more waiting for weeks to get your paycheck, and no more loans or overdraft fees just because you need some extra cash urgently.
With Earnin, there are no loans, no fees or interest. Just your money, in your bank account, instantly.
So, how does it work exactly?
All you need to do is to allow Earnin to track your work hours and then connect your bank account to Earnin to get your paycheck in advance.
When you finally get paid by your employer, then you pay Earnin back with ZERO Interest and Zero FEES.
By the way, Earnin works independently from your employer.
It will never contact your employer whatsoever.
If you have issues with your medical bills, Earnin can help you negotiate your bill and you choose how much you want to pay for its service if you like the work they did.
So, is Earnin app safe and secure to use?
Security is a top priority at Earnin.
It uses 256-bit data encryption of industry-leading standards to keep your data secure.
Also, it’s compliant with US privacy and data security laws to ensure your utmost privacy.
Lastly, it never stores your bank login credentials.
Who is Earnin suitable for?
If you are a salaried employee who gets paid by direct deposit, then Earnin is perfect for you if you want to get your paycheck in advance.
Trusted and downloaded by more than 5 million users, Earnin is helping people get advance pay up to $500. (Note: No loan, No Interest & No Fees)
Download Earnin & Get Advance Pay Up To $500