Criteria To Get Paid Sooner
Lenders will never allow you to borrow without first evaluating your credit application against a set of criteria. Next, many apps will only work if the ways you work and get paid meet certain conditions. Depending on the app you choose you may need to meet some or all of the following conditions:
- Some apps will evaluate your credit file and make a lending decision based on your repayment history. This does not mean you need to have a perfect credit file. FasterFunds and Avant for example will consider you even if you have bad credit, but you will be declined if you have severely adverse credit history such as a recent bankruptcy.
- Electronic payroll. Earnin is example of an app that requires you to be enrolled in an electronic payroll system. This is because Earnin needs to know that you are actually working before the app will issue a loan to you.
- App subscriptions. Other apps require you to pay a monthly subscription fee to get access to loans. Dave requires a small $1/month subscription fee. MoneyLion Plus lets you borrow at low interest rates, but you need to subscribe to a $79/month plan that includes a savings component.
- Bank accounts. Note that many apps will require you to have a bank account. This requirement stands for two reasons: first, an app needs the ability to deposit funds into your bank account. Next, many apps automatically withdraw repayments from your account.
Should You Accept Your Lenders Early Renewal Offer
If you receive an early renewal offer from your lender, your decision of whether or not to accept it should be based on the interest rate that is being offered. Remember: Itâs highly unlikely that the lender who offered you the best rate for your last mortgage term will be able to offer you the lowest mortgage rate thatâs on the market today. Your best bet is to shop around with other lenders until you find the lowest rate.
Hereâs one example of how shopping around for a better interest rate at mortgage renewal time can save you thousands of dollars in interest:
Letâs say you have a home valued at $350,000 with a $280,000 mortgage . Your 5-year fixed-rate term is up for renewal, and your lender is offering to renew you for another 5-year term at a fixed rate of 2.69%. If you accept this offer, you would pay $34,744 in interest over the 5-year term .
After taking some time to shop around, however, you find a different lender who is willing to offer you a 5-year fixed rate of 2.34%. By accepting this offer, you would pay just $30,144 in interest over the 5-year term thatâs $4,600 less than you would have paid your existing lender over 5 years, had you decided to accept their early mortgage renewal offer. Your monthly payments also become $1,232.
=Interest savings by switching lenders: $3,990
What Time Is Early Direct Deposit Posted
The deposit post time depends on your employer or government agency. With Varo, instead of holding on to your money while waiting for payroll funds from your employer like traditional banks do, we immediately post the deposit to your account when we receive the files. Remember, the files can come at different dates/times each pay period.
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¹Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to payer’s support of the feature and timing of payer’s funding.
²Out-of-network cash withdrawal fees apply. Third-party and adding cash fees may apply.
Axos Bank Direct Deposit Express
Another online bank that offers faster access to your paycheck is Axos Bank. Its fee-free Essential Checking account comes with Direct Deposit Express, a feature that gives you access to your paycheck as soon as your employer submits the payroll instruction to the bank up to two days before your coworkers get theirs. All you have to do is set up direct deposit for your account, and the bank does the rest.
Essential Checking from Axos also offers other perks, such as:
- Low Fees. Essential Checking has no monthly maintenance fees, no minimum monthly balance, and no overdraft or nonsufficient funds fees. It also offers unlimited reimbursement for ATM fees from other banks within the United States.
- Online and Mobile Banking. You can use the Axos website or mobile app to manage your account from anywhere. Its features include free mobile check deposit and online bill payment. And you can integrate it with third-party apps like Venmo or Mint.
- No-Hassle Switching. If you dont currently have an Essential Checking account, its easy to set one up. Axos can walk you through the whole process in two minutes. You dont even need to make an initial deposit.
Another Axos account that comes with Direct Deposit Express is Nationwide My Checking. This special checking account is available only to customers of Nationwide insurance. Its similar to Essential Checking except it requires an opening deposit of $100.
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Money Management: How To Know When Your Deposits Are Available To Use
Managing your money means knowing how much you have in your bank account. An important part of that is understanding when the money you deposit gets added to your account. Sounds simple, right? It is! Here are a few key points that can help you stay on top of your account balance.
The role of business days and holidaysAll banks have guidelines on how deposits get processed. If you deposit cash, that money goes directly to your account and will be ready for you to use immediately. But for checks and other items that might need verification , the money usually wont be available until the next business day.
Its important to realize that weekends and federal holidays dont count as business days, even if your bank is open. If you make a deposit on or the day before a holiday, or on a weekend, you can expect to wait a little longer to access that money.
Lets say you deposit a check at your bank on a Friday. Normally, those funds would be available to you on Monday. But if that Monday happens to be a holiday, then the money wont actually show up in your account until Tuesday the next business day after the holiday.
Banks also have policies related to when they process transactions. Often, they wait until the end of the day, and then go in order by the time of the transaction. For instance, if you make a purchase with your debit card in the morning, then make a deposit in the afternoon, banks will usually process the debit before the deposit.
Let Your Money Work Harder
You can earn industry-leading checking and savings account interest rateshigher than the national average3 with TMobile MONEY.
All T-Mobile MONEY customers earn 1.00% APY* on all checking and savings balances. T-Mobile wireless customers with qualifying service can earn 4.00% APY* on balances up to $3,000 and 1.00% APY after that in their T-Mobile MONEY checking account by registering for perks and making at least 10 qualifying purchases per month using their T-Mobile MONEY card. Checking account that is in good standing and has been funded is required to open a savings account.
* Review APY details or see below.
3 Based on information provided by the
1 Get paid up to two days early with direct deposit: Subject to description and timing of the employer payroll-based direct deposit, we typically make funds available the business day received, which may be up to two days earlier than scheduled.
2 How Got Your Back works: Available only for Checking accounts and T-Mobile wireless customers with a line on a qualifying postpaid plan who have registered for perks. Got Your Back overdraft protection will begin once at least 10 qualifying purchases using your T-Mobile MONEY card have posted to your Checking account before the last business day of the month. You are only required to meet this purchase requirement once to receive Got Your Back benefits. See “Got Your Back” Terms and Conditions for more details.
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Pros Of Direct Deposit
ConsumerCredit.com performed a survey in 2018 and found that speed was the number one reason people used direct deposit. Results showed that 53% of users prefer direct deposit for its immediacy, while 47% of people enjoy it because it’s free. Some of the other reasons that users use direct deposit include:
- No risk of losing physical check
- No holds
Direct deposit also saves you time. Once you link your bank account, you never have to drive to the bank and wait in line to deposit a check again. The automated process lets you spend more time on the important things in life.
What If I Can’t Resolve A Problem With My Bank
Contact your bank first. You might also contact the recipient of the payment. If you are unable to resolve the problem through the bank, and a national bank is involved-a national bank has the words “National,” “National Association,” or “N.A.” in its official name-you may contact the Customer Assistance Group at the Office of the Comptroller of the Currency toll free at 1 613-6743.
For complaints about state-chartered financial institutions, contact the relevant state attorney general or state banking department. Links to state attorneys general can be found on the Website of the National Association of Attorneys Generals. The Conference of State Bank Supervisors lists state banking department links. You may also contact the Federal Reserve Board, or the Federal Deposit Insurance Corporation regarding state banks that are not members of the Federal Reserve System.
If you have a problem with the recipient of your checkan entity other than a financial institution, such as a department storecontact the Federal Trade Commission toll free at 1-877-FTC-HELP 382-4357). More information about contacting the FTC is on the Web.
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Navy Federal Credit Union
To qualify for Navy Federal Credit Union membership, you must be an active-duty or retired member of the military, which includes the Armed Forces, National Guard, Coast Guard, and the Department of Defense.
If this sounds like you, then NFCU could be a great choice because they dont use ChexSystems or EWS. Plus, there is a free checking account option with no minimum balance requirements and no monthly service fee with a qualifying direct deposit.
Setting Up Direct Deposit
A written authorization is required to establish a direct deposit. The quickest way to sign up for direct deposit is to contact your employer, government agency or other agency issuing you a check. They will provide the proper forms and instructions.
You may also be able to complete our PNC Direct Deposit enrollment form and submit it to your employer or other non-governmental agency along with a voided check from your PNC account. Forms are available online or at any PNC Bank branch.
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Overdraft Coverage Vs Overdraft Protection
If youre looking for an overdraft, make sure you understand how Overdraft Protection differs from overdraft coverage.
As previously mentioned, overdraft coverage involves your bank advancing cash to make a purchase happen when you dont have sufficient funds in your checking account. Youre charged a fee for every overdraft item.
With Overdraft Protection, however, the bank allows you to link a savings account or another eligible account to your checking account. If you dont have enough funds in checking to cover a transaction, funds are transferred from your linked account to cover the purchase.
Bank are no longer allowed to automatically sign-up customers for overdraft services when they open an account. You must opt-in for these services to protect your checking account.
How Banks Process Your Paycheck Early
How is possible for banks to get your paycheck into your account early?
“From a technical standpoint, any bank is capable of getting you your paycheck up to two days early … but they choose not to because they make money holding your paycheck hostage for a day or two,” Kate Wauck, Vice President of Communications for Wealthfront, told Business Insider.
“It’s referred to as ‘float’ which is basically banks double-counting deposits for a short period of time before they clear the transaction so they can earn interest on both of the amounts,” she continued. “A bank credits a customer’s account as soon as a check is deposited. Until the check clears the account it’s drawn on, the amount it’s written for ‘exists’ in two different places, appearing in the accounts of both the recipient’s and payer’s banks. So a bank will earn interest on the amount twice. So as you can see there isn’t huge incentive for banks to speed up the process because of float and their ability to double interest payments.”
Some banks choose not to hold onto your direct deposits, though, which can provide incentive for you to bank with the institution.
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Final Thoughts: Dont Spend Without A Plan
Regardless of whether you use a payday advance app, direct deposit, or get paid the old-fashioned way by paper check, a budget is key to making your dollars stretch. If you havent nailed down a plan for spending , thats something you should tackle ASAP.
After all, you work hard for your money, and we want it to work just as hard for you!
Benefits Of Direct Deposit
The benefits of direct deposit generally outweigh the benefits of receiving a paper check. For example:
- With electronic deposits, you can have your pay immediately available on payday without being present or having to go somewhere to deposit or cash your paycheck.
- Direct deposit can also mean you get your money faster from other payors as well, like the IRS, rather than waiting for a check in the mail. Most Americans recently witnessed getting paid sooner with coronavirus stimulus checks. Everyone with direct deposit received the stimulus money much quicker than those receiving mailed paper checks.
- You can make savings easier by splitting your direct deposit into two or more accounts. If you can put a portion, such as 20%, of your paycheck into a high-yield savings account, to save automatically each month.
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When Are Bank Holidays
Financial institutions and the ACH follow the Federal Reserve Systems holiday schedule. Banks celebrate the following federal legal holidays:
- New Years Day
- Presidents Day
If a holiday falls on a Sunday, all Federal Reserve offices are closed on the following Monday. If a holiday falls on a Saturday, only the Board of Governors will observe it the day before .
How Banks Process Your Paychecks Early
Banks can process your direct deposits early, but many choose not to. Digital banks caught onto this trend and developed tools to give you early access to your funds.
Lets use an example to illustrate how digital banks get your paycheck early. An employer who uses direct deposit to pay their employees has access to employee information like their bank account number and routing number.
When an employer sends a direct deposit, they use this information to create a batch order of direct deposits. When the employer creates a batch order, they also set a release date. The release date is when the money becomes available to you in your account.
So, if your employer creates the batch order on the 15th, with a release date on the 19th, you wont have access to your funds at a conventional bank until the 19th.
Digital banks with early direct deposits work by crediting your account the amount specified by your employer on the batch order. Once your employer sends the direct deposit, youll have immediate access to your money, regardless of the release date. On average, this ends up being two days earlier than normal banks.
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Cons Of Early Direct Deposits
Despite the perks of early direct deposits, there are still some potential drawbacks to bear in mind.
What Is Direct Deposit
Direct deposit involves an employer sending pay funds electronically into a checking or savings account. The process offers a faster alternative to physical money or checks. It uses a network called an automated clearing house to move your paycheck from your employer’s bank account to your own.
Direct deposit does not require a clearance period, so thereâs no waiting for your balance to clear. Your bank will provide you with an electronic receipt to show the deposit. While paychecks make up most direct deposits, they can also include disability payments, Social Security benefits, and tax refunds.
If you want to receive a direct deposit, give your bank name, account number, and routing number to the person making the deposit. If you work for a large company, youâll want to talk to someone in accounting or human resources. It takes a few days to set up the recurring payment.
All funds are electronic. Your employer will send them at midnight on the due date. Because direct deposit is automated, you will not have to wait to use the money.
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