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Guide to Making Direct Deposits Into a Savings Account

Making Direct Deposits Into a Savings Account
Rebecca Safier
Rebecca SafierUpdated March 9, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Can you direct deposit into a savings account instead of a checking account? Yes, you can typically request that all or a portion of your paycheck (or other payments) be deposited directly into your savings account. This can help you build your savings and avoid the need to make a separate transfer from your checking to your savings account.However, there are a few things to keep in mind before you make the switch, including whether or not you’ll have enough funds in checking to cover your monthly bills and/or avoid monthly fees. Read on for key things to know about setting up direct deposit into a savings account.

Understanding Direct Deposits and How They Work

Direct deposit is a free service that allows you to receive your paycheck via electronic transfer rather than paper check. Many employers offer it because it saves them from having to print out and mail checks. Employees benefit too, since it saves them from having to deposit physical paychecks into the bank after every pay period.The direct deposit process is done via the Automated Clearing House (ACH), an  inter-bank transfer system, which can take anywhere from one to three business days. However, many employers set up their payroll software so that employees get their direct deposit on their exact pay date. To do this, they may initiate payment a day or two before that date to allow time for the ACH transfer process. Once the funds are credited to your account, you can typically access them immediately.While direct deposit is most commonly associated with paychecks, you can set up direct deposit for many other types of payments, including:
  • Retirement account payments 
  • Unemployment benefits
  • Child support payments
  • Federal and state tax refunds
  • Government benefits, such as Social Security 
  • Investment dividends and interest
Recommended: What Are ACH Debit and ACH Credit Transactions?

Can You Direct Deposit Into a Savings Account?

Yes. When you set up direct deposit, you can typically choose to have the money transferred into your checking or savings account. The direct deposit form will usually allow you to select the “account type” and then enter the routing and account number of the bank account you would like to have your checks deposited into.You also may have the option of splitting up your direct deposit so most of it goes to your checking account and a small portion goes to savings. For example, you might want to have 80% put into checking and 20% put into savings. 

Should You Direct Deposit Into a Savings Account?

It depends on your financial situation. Checking accounts are designed for everyday money management, like paying bills and using your debit card. Savings accounts, on the other hand, are set up for storing cash you don’t need right away. They typically limit you to six withdrawals per month and pay higher interest on your deposits than checking accounts.If you don’t need your entire paycheck to cover your monthly expenses, depositing some of your paycheck directly into savings can be a great idea. This puts saving on autopilot, and can make it easier to meet your short-term savings goals, whether you’re trying to build an emergency fund or save for an upcoming vacation or other large expense. Just be sure that you have enough funds in your checking account to cover your recurring bills, as well as meet any required balance minimums, or you can risk getting hit with overdraft or monthly account fees.

Benefits of Direct Deposit

Whether you choose checking or savings (or both) for your direct deposit, this method of payment comes with a number of benefits. Here are some of the biggest perks of direct deposit.

Easy to Use

Direct deposit is quick and easy to set up and, once you do, you’ll no longer have to manually deposit your paycheck into your bank account. The money will simply show up, typically on your usual payday.


With direct deposit, you don’t have to wait for your paycheck to come in the mail, or wait for that check to clear after you deposit it into your account. The funds transfer quickly and once the transfer is complete, the money is available for use. 


Direct deposit is also a safe method of transferring money. With no paper checks involved, there is no risk of a check getting lost, stolen, or altered. Although online hacking is possible, it’s unlikely — banks have high-level security and encryption processes in place to protect your personal information. 

Banking Perks

Many banks offer special benefits to customers who set up a recurring direct deposit into their accounts. For example, the bank may waive monthly maintenance fees or offer a higher annual percentage rate (APY) on linked checking and savings accounts. Some banks even offer early access to your paycheck.


If you opt to have some of your paycheck deposited directly into your savings account, you’ll benefit from automating your savings. Even if it’s only a small portion of your paycheck, it can add up over time. Savings accounts also pay compounding interest (which is when your interest earns interest), which also helps your balance grow over time. 

Steps for Setting up Direct Deposit Into a Savings Account

The process for setting up direct deposit into a savings account (or checking account) typically involves the following steps.

1. Fill out Your Employer’s Direct Deposit Form

This may be a paper form or you may be able to access the form online through your employer’s benefits portal. You’ll likely need to provide:
  • Your bank’s routing number You can find the routing number for a savings account by logging into your account or looking at your bank statement. The routing number for your checking account is typically printed on the front of the check on the bottom left side.
  • Your account number You can find your savings account number by logging into your account or looking at your bank statement; your checking account number is typically printed on the front of a check just to the right of the routing number.
  • Type of Account The direct deposit form usually offers boxes with account types; simply check off what type of account you’re selecting. In some cases, you may be able to split up the deposit between your checking and savings accounts.
  • Mailing address of your bank You can use the address of the branch you typically go to. If it’s an online-only bank, you can find the bank’s mailing address by logging into your account. 

2. Choose a Deposit Amount

This might be the full amount of your paycheck, or you may be able to split your pay up so that most goes into checking and a small portion goes into a high-yield savings account to take advantage of a higher annual APY. 

3. Attach a Voided Check if Required

If you’ll be direct depositing some or all of your paycheck into checking, you may be asked to attach (or, if you’re signing up electronically, scan) a voided check, which is simply a check you write “VOID” on in is large letters across the check so it can’t be used. 

4. Submit the Form

If the form is online, you’ll simply hit a button labeled something like “complete” or “submit.” If it’s a physical piece of paper, you’ll want to give it directly to someone from payroll or human resources since the form contains sensitive information.Recommended: Guide to Online Savings Accounts

The Takeaway

Direct deposit is a convenient, secure, and fast way to access your paychecks and other payments. You won’t have to wait to receive a paper check in the mail or go to the effort of depositing it into your account. Plus, you may have the option of depositing your paycheck directly into your savings account, checking account, or both. Splitting up your paycheck between accounts can be an easy way to automate your savings and build up your rainy day fund — as long as you have enough in checking to cover your bills. Your savings can earn competitive interest, especially if you open a high-yield savings account at an online bank. These accounts typically pay more than the average savings account interest rateIf you’re interested in finding the best rate for your savings, Lantern by SoFi can help. With our online banking marketplace, it’s easy to compare high-yield savings accounts based on APY, fees, and balance minimums.Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

Can direct deposit go to two different banks?
Can you direct deposit into any checking or savings account?
Is it secure to direct deposit to savings?
Can I direct deposit without my personal information?
Photo credit: iStock/miniseries

About the Author

Rebecca Safier

Rebecca Safier

Rebecca Safier has nearly a decade of experience writing about personal finance. Formerly a senior writer with LendingTree and Student Loan Hero, she specializes in student loans, financial aid, and personal loans. She is certified as a student loan counselor with the National Association of Certified Credit Counselors (NACCC).
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