What is Direct Deposit (DD)


Together with the tide of the $300 sign-up bonus for Discover Checking comes the question: what Direct Deposit (DD) really is. The purpose of this short post is to have the problem solved, which would be divided into two parts: the real Direct Deposit and Edge Ball.

1. The Real Direct Deposit

Direct Deposit is a deposit of money by a payer directly into the payee’s bank account in the form of payroll, social security, pension and government benefits. However, the real Direct Deposit only takes place in the payment of payroll for most of people.

The fact is that Direct Deposit is very convenient which can replace the receipt of check as wages or salaries. Besides, humans are born to be lazy and so when the configuration of opening accounts is finished, few would take the trouble to find another bank. Then the bank would keep gaining money. That is why banks tend to require Direct Deposit for Checking Account sign-up bonuses.

Operations differ from one business to another but the following two are mostly chosen:

  1. Ask your HR who usually knows specific operations. He/she would produce a form and ask you to fill in your bank information and to attach a bank check with your handwritten VOID on it and he/she will take care of the rest.
  2. Google “the company name + Direct Deposit”, then you will find the online procedures. For instance, this web page is the instructions of operation for UCSD.

I need to emphasize that, the following operations DO NOT count as Direct Deposit: cash deposit, check deposit, bank transfer of your other bank account, and bank transfer from other individual.

2. Edge Ball

Though we have well-defined Direct Deposit above, some bank transfer is misrepresented as Direct Deposit. That results from the fact that in the actual operations, many banks find it really hard to distinguish salary payment from common bank transfer. And different bank may have various ability to distinguish this, which makes it impossible to have universal rules tell which transfer counts as Direct Deposit and which does not count. The best place to look up this information is this web page by Doctor of Credit who will add all sorts of online data to improve the page.

Frankly speaking, if the real Direct Deposit can be set by your salary, don’t use the Edge Ball methods. The banking system is changing all the time leaving data points not as trustworthy as a short time ago. Especially, Discover Checking used to offer sign-up bonus without Direct Deposit requirement, therefore, data points about it are unavailable on the Internet and we can only build up relevant data points from this time.

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