Direct Deposit
Electronic payment of wages directly into a bank account.
Direct deposit transfers employee wages electronically from the employer's bank account to the employee's account on payday via the ACH network. It eliminates paper checks, reduces payroll processing costs, ensures employees are paid on time, and is required by law in some states. Most payroll services include direct deposit as a standard feature.
Example
A company sets up direct deposit for all 15 employees, and each payday wages are automatically deposited into their accounts by 9 AM without printing a single check.
Why It Matters for Your Business
Direct deposit reduces payroll costs, eliminates check fraud risk, and ensures employees receive their pay on time regardless of location.
Related Terms
More Banking Terms
ACH
Automated Clearing House - an electronic network for financial transactions.
APR
Annual Percentage Rate - the yearly cost of borrowing including fees.
APY
Annual Percentage Yield - the real rate of return on savings including compound interest.
Bank Reconciliation
Matching bank statements with internal records to identify discrepancies.
Business Checking
A bank account designed for business transactions.
Related Financial Guides & Resources
Automate Your Finances with AI
FiscalInsights uses AI to automate bookkeeping, track expenses, and forecast cash flow — so you can focus on your business.
Start Free Trial