Top Online Banks That Pay 2 Days Early

How banks can offer your paycheck early

Early direct deposit works much like a regular direct deposit. Your employer submits payroll to the Federal Reserve’s automated clearinghouse (ACH) system.

The ACH is a nationwide network through which banks and credit unions send each other electronic credit and debit transfers like direct deposits. Your direct deposit may arrive 2 to 3, or more days before your scheduled payday.

Most banks hold onto your deposit until your employer’s allotted payday. Banks with early direct deposit will release your paycheck as soon as it receives notification from the ACH a deposit has arrived.

This is the reason why you may get paid up to two days earlier than your coworkers at the same company.

For example, let’s suppose that your coworker has a checking account at Bank of America and you have a checking account at Current which offers early direct deposit. Your payday falls on a Friday. 

Your employer sends payroll instructions to their bank Monday morning. After your employer’s bank and the ACH finish passing deposit instructions along, your bank and your co-worker’s bank both receive the payment files on Wednesday.

Next, both banks start processing the payment instructions. But, your co-worker must wait for his paycheck to arrive at his Bank of America account, while your bank, Current, deposits the money into your account so you can access your funds right away on Wednesday instead of getting paid on a Friday – up to two days faster than your coworker.

How to set up early direct deposit?

Setting up early direct deposit involves the same steps as a regular direct deposit. Here are the steps to take:

• Get a direct deposit form from your employer or your bank.
• Fill in your banking information that includes personal and bank details like the bank address, bank routing number, account number, and bank address.
• Choose to deposit 100% or a partial amount of your paycheck into your checking account.
• Attach a voided check or deposit slip, if required.
• Give the form to your employer, and wait for the direct deposit to go into effect. It may take several weeks.

The main difference in early direct deposit vs. direct deposit is that early direct deposit simply allows you to access your paycheck funds faster. But in both cases, it is essential to make sure that your routing and account numbers are accurate to avoid returned funds and fees.

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. 

Reasons Employees Like Banks That Offer Early Deposits

Most people love getting paid – whether you get paid weekly, bi-monthly, or monthly. Some reasons people are happier on paydays include:

• Get ahead of your debt
• The ability to avoid timing issues and overdrafts with paying bills on payday by receiving your paycheck earlier
• Payday means you can pay bills and have peace of mind
• Dine out with friends or family
• Make a purchase you’ve been waiting for
• Enjoy a night out
• Attend a sporting event

Stay on top of your bills by getting paid early

Getting paid early lets you pay bills on time and do more with your money. You can even boost your emergency savings and get a head start on earning compound interest. Get a handle on your money with funds made available to you right away instead of the bank holding onto your money. Prevent overdraft fees for running out of money!

Final thoughts

These five online banks are not the only banks that offer early direct deposit. There are many banks that feature early paycheck options. Some banks may have a small fee involved for the service. Check your local banks and credit unions if you prefer banks that have branch locations.

Direct deposit is already convenient, but early direct deposit ensures you get paid much faster.