Direct deposit has been billed as the convenient way of having your paycheck put into your bank account without you having to do anything. Your check is just routed into your bank from the company and it shows up in your bank account at a specified time. While this seems like a great way to save you a step in cashing your check, are there any ways in which direct deposit could be a hindrance to you?
The first drawback to having direct deposit is that you can’t always control your money. When you have a paycheck you know that in order to get the cash you have to physically go cash it. This means that you determine when your money is actually available to you. This helps if you are trying to teach yourself how to save money and don’t want to spend it all at once.
Another drawback is that you actually need a bank account to cash your checks. If you don’t have a bank account then you are out of luck. While establishing a bank account is pretty simple, there are those who have their reasons for not wanting to open one. This means that you are going to be unable to reap the benefits even if you wanted to without an account.
What happens if someone else gets your check? It can take a long time to prove that you haven’t gotten your money and for the bank to actually route the money into your account. There are stories out there of people getting money deposited into an account because they had a similar last name or an account number is similar.
Banks can be hacked into and you can lose your money. What happens if a bank has loose security and all of a sudden some criminal has access to your account and your money? Then you could lose your money even if it is deposited properly and you might not even know about it until it is too late. This doesn’t happen if you have a check that you can physically cash. Sure, you might get robbed, but you have at least a fighting chance.
Direct deposit is a great system that usually runs smoothly, but there are any number of things that can go wrong when dealing with technology. Besides, do you need all your money available to you at once? It can be a huge advantage when it comes to saving money if you don’t have it all at once or at the press of a button.