Direct deposit into a savings account

Direct deposit—alliteration and a convenient way to get paid. Rather than receiving and depositing a check every pay period (or other checks, such as Social Security), direct deposit automatically transfers your pay to your bank account. So you can spend less time check-signing and more time high-fiving (about your newfound time).

But you may have some questions. Should you direct deposit to a checking or savings account? Can salary be deposited in a savings account? Do people still high-five? Check out the SFAQs (semi-frequently asked questions) below to learn more.

Typically, yes—many direct deposit programs allow you to send your paycheck to a savings or checking account, and some even allow you to split it between the two.¹

Savings accounts may have transaction limits and typically have higher interest rates than checking accounts, so people tend to use these to save.² Checking accounts, on the other hand, have no limits on transactions and generally have little to no interest, so they’re usually used for everyday spending.²

People may split their direct deposit between these accounts to fund their everyday lives while building a nest egg or emergency fund.

Generally, you’ll follow these steps:³

1. Ask your employer for a direct deposit form. If they don’t have one, you can probably get one from your bank or credit union.
2. Complete the form. You’ll usually need the following: your bank’s address and routing number, your account number, the type(s) of account(s) you wish to deposit to (generally checking or savings) and possibly other info, such as your Social Security number.
3. Choose a deposit amount. This is where you can choose to put 100% in a single account—or split it up between savings and checking.
4. Submit it. After you’ve taken all these steps, give the form to your employer and give yourself a nice pat on the back. In some cases, you may also be asked to provide a voided check.

Direct deposit forms differ, so there’s no evergreen answer. But if you’re enrolling in direct deposit, search the form for "account type." Here, you can usually choose savings. And if you’re already enrolled in direct deposit, you can talk to your HR or payroll representative about depositing to your savings account. You may also be able to do this online.

Generally...no. To set up direct deposit, you need to give your employer your bank account and routing number—and typically, you don’t have the right to give out somebody else’s bank account information. Also, the bank will likely not authorize a deposit if the name on the deposit does not match the account owner’s name, as this could be an error or fraud.

If you want direct deposit, but don’t have a bank account, you may be able to get a prepaid debit card and have the money deposited onto it.⁴ Some online payment systems and apps can also receive direct deposits.

There’s no right or wrong answer—it really depends on your situation. If your employer allows you to split your direct deposit between your savings and checking account, you may choose to do that.

However, if your checking account has a minimum balance you must maintain, make sure that having part of your paycheck deposited into another account doesn’t cause you to dip below that minimum, as you may face monthly maintenance fees.

Ideally, as much as you can afford to while covering basic needs. However, if you’re looking for a nice, round number: 20% of your after-tax monthly pay (the money you take home) is “one rule to live by,” according to the Consumer Financial Protection Bureau.⁵ But the agency says you will have to decide what works best for you, depending on your situation.

Though, if you can’t afford to put away 20% of your pay, don’t worry—every contribution you make counts. Also, if you have credit card or student loan debt, consider prioritizing that—as you may pay more in interest the longer your debt sticks around.⁶

Typically, yes. In fact, many direct deposit programs allow you to split your pay between savings and checking accounts at different banks.⁷ You’ll just need to add your banks’ routing numbers, your account numbers and the account type for each. This can be a game changer when it comes to saving.

Say you have a checking account at Bank A and a high-yield savings account (a savings account with a higher interest rate than standard savings accounts) at Bank B. If your employer allows you to split your direct deposit between these two banks, you don’t have to manually transfer money into your high-yield savings account—you can just sit back and watch your savings add up.

If direct deposit isn’t for you, but you’re still looking to save, there are a few alternatives.

Generally, yes. There are typically a few ways of doing this:

• Bring your check to your bank and fill out a deposit slip (with your savings account number).
• Deposit your check through an ATM.
• If your bank offers it, use their mobile app and take a picture of the check.

Typically, yes. This can be another alternative to sending money to your savings account without direct deposit—though unlike direct deposit, wire transfers may come with service fees.⁸ To do this, you’d simply do a standard wire transfer—generally filling out a physical or online form. You’ll typically need to add the recipient’s bank name, recipient’s routing number, payee’s account number (in this case, their savings account number) and any additional information that needs to be provided.⁹

Now that you understand how direct deposit can be a strong tool when it comes to saving, maybe it’s time to consider making the change. You can spend less time depositing checks and more time saving, high-fiving and patting yourself on the back.