Every year, the Treasury Department of America restores around 800,000 checks that have been lost, stolen or damaged in transit. Now, for instance, the federal government gives social security, veterans benefits and other federal payments electronically, otherwise called direct deposit, although one could still be given federal payments by check. Additionally, many companies offer direct deposit of late.

The benefits of direct deposit are many. For one, checks cannot be lost or stolen. For another, payments get to an individuals account the day of issue, no matter if the person is unavailable or unable to reach the relevant financial institution. Moreover, checking can be done at a very low cost, in some cases at no cost, because banks dont have the additional expense of processing paper checks. Direct deposit protects checks from bouncing because they are deposited directly and on time. It also saves customers trips to the bank, and the hassle of waiting in line at the bank or ATM. The Federal government (as well as many companies) tends to deposit checks the previous day if payday falls on a holiday.

However, it is all not a bed of roses with direct deposit. For example, if one is attempting to protect ones earnings from being embellished, or from someone else to whom the account is accessible, then cash or a paper check is definitely better.

In order to establish direct deposit, the employee has to go through the company of employment, who will have the relevant paperwork necessary to set it up. They will want the persons social security number and an empty check containing the banks routing number and the particular account number of the individual. It takes a minimum of two weeks on average for direct deposit to become functional.

Setting up direct deposit for federal paychecks can usually be done over the phone or at the local federal building. However, federal government employees will not get a voucher every month stating how much was deposited in their account. They will have to confirm the direct deposit with the bank. This voucher, which looks just like a real check and contains all the same information, is usually sent to employees of private companies.