When Do Direct Deposits Hit? (And How Long Does It Take?)

If it seems like forever until payday, you’re not alone. Up to 74% of millennials live paycheck to paycheck, meaning payday can’t come soon enough. 

Currently, direct deposit is standard for most paychecks, but the timing of when the cash actually hits your bank account can vary. Read on to learn how these payroll direct deposits work, when the money typically arrives, and how you can get your money even faster.

How payroll direct deposit works 

Before an employer can pay you with direct deposit, they’ll need to get your payment information. This typically includes:

Name on the account
Routing number
Bank account number
Account type (checking or savings)

They may have you sign a permission form that authorizes them to move money directly into your account. All of this information gets entered into the payroll system to set up future payments.

From there, anytime the employer wants to pay you, they (or their payroll provider) enter wage amounts and confirm the payment details. The money is then transferred via the Automated Clearing House (ACH) network from their bank to yours. As soon as your bank receives the ACH instructions with payment details, it will confirm them and credit your account. The employer’s bank account is then debited for this same amount. 

Benefits of direct deposit

Businesses have been moving to direct deposit to help simplify payroll, especially when more and more banking happens digitally. The advantages for employees include:

No need to drive to a bank to cash a check or deposit it online
Immediate access to money on payday
No risk of a check getting lost in the mail
Ability to have a check split into different accounts to help with financial planning
Get paid even when not scheduled to work that day or when working from home

When do direct deposits usually hit? 

As convenient and secure as direct deposits are, most employees care most about speed. Getting paid faster is always better. So, what about direct deposit timing? The answer is that direct deposit timing depends on a few factors, including:

When your pay period ends
When the employer sends the money
Bank schedules
The receiving bank’s policies

So, while it takes around one to two business days to process a payment, any of these factors could delay it somewhat. 

Nacha, which administers the ACH network, gives some additional details on the timing rules for sending ACH payments. While payments get processed 23.5 hours of each day, payments also have to settle. This settlement is needed to complete the payment and only happens during the Federal Reserve’s settlement system hours. The Federal Reserve is closed on federal holidays and weekends and on business days after 6:30 p.m.

According to Nacha, if you would be paid on a weekend or a holiday, your employer should pay you on the previous Friday. This ensures you don’t have to wait longer to get your money. 

Banks and apps that let you get paid early 

The one- to two-business-day rule can be broken. That is, banks have been known to give you access to your money even before the settlement finishes. That’s because, according to Nacha, direct deposits happen so often that banks have a process in place to use their own funds until the payment is complete. These banks can “see” the payment and know with reasonable assurance that it will settle, so they may show the amount in your bank even before it’s officially in your account.

But not every bank is like this, so it may be worth it to look into ways to access your funds earlier than one to two business days (or longer for some banks). Here are some options to consider, along with their pros and cons.

Banks with early direct deposit

These banks credit their customer accounts up to two days early:

Wells Fargo
SoFi
Fifth Third Bank
Capital One
Ally Bank
Varo Bank

Pros: Money goes into your existing account, giving you access from an ATM, bank branch, or cash back with purchases at participating retailers. 

Cons: Must have a bank account, and some checking accounts come with additional monthly maintenance fees.  

Apps for cash advances and early wage access

Another option is a cash advance from your paycheck. Unlike payday advance solutions of the past, which required you to walk into a brick-and-mortar store, today’s cash advances typically take place through apps. Several options exist, including:

Earnin: Get up to $150 a day with no mandatory fees for transfers that take one to two business days to process. Pay a fee only if you want cash instantly or wish to leave a tip. The advance amount is based on past pay history; you must earn a certain amount each pay period to qualify. 
Dave: Get a checking account, debit card, and access to a savings account called ExtraCash that you can fund and then overdraw by up to $500 (acting as a cash advance). Dave charges a $5 monthly subscription fee to use these features, which also include budgeting tools, alerts, and other money management resources.
Klover: Link your existing bank account to get approved for an initial $200 cash advance. Earn points from taking surveys and sharing data that you can use for rewards and to get credit toward a larger cash advance. No fees or subscription costs to access cash, but you must continue sharing data to get access to cash advance features. 

Pros: Get money right away. Doesn’t have to be connected to your next earnings, so if you have a lower check coming, you can still borrow a healthy amount.

Cons: These cash advances come with much higher fees that total a bigger annual percentage rate (APR) than other loans. Because the fees and interest rates are so high, some states have banned them altogether. 

Apps for early wage access

Unlike traditional payday advance loans, wage access apps only give you access to money you’ve already earned but have not yet been paid out. You can’t borrow more from your paycheck than you’ll be receiving next payday, and these apps exist to give you “access” to your own money. 

Payactiv, DailyPay, One@Work, and Tapcheck are earned wage access (EWA) apps that require your employer to register to participate. If your workplace doesn’t offer EWA, you won’t be able to use these apps to get money early. Each option varies by how much you can request in advance, with most letting you get 50% to 100% of your upcoming check ahead of payday. 

Pros: Lower fees and possibly no interest means you might pay less than traditional payday loans. Since you aren’t borrowing from a lender, you don’t increase your debt.

Cons: Instant transfer fees can add up. Because it’s not a loan, you don’t build credit using these apps. You may put yourself in a position to not have enough on payday to make ends meet. Not all employers work with an EWA solution. 

Should you take a payday advance?

Whether you use a wage access service or take out a traditional payday loan, consider these downsides:

Smaller paychecks later. The money you spend now can’t be used later, making it difficult for some people to manage budgets with these advances. Borrowing against a paycheck can also disrupt regular bill paying. 
Overdraft and NSF fees. Paying back the payday loan happens through ACH payments, so the money comes out whether you have it in the bank or not. This can lead to expensive nonsufficient funds fees (NSF).
Debt cycles. Without addressing the “why” you don’t have enough money to last until payday, it can be easy to get into a habit of borrowing next month’s check to use for today. You may never really catch up and continue borrowing, paying fees, and falling behind. (The average user of wage access apps uses them up to 36 times a year – or for every payday.)
Little fees add up. Some wage access apps don’t charge fees initially to access money. But to get the money instantly to use right away in an emergency, you’ll pay transfer fees of 1% of the total amount or more.
Estimation errors. If you aren’t completely sure how much you’ll earn on the next check, you could borrow more than you make, leading to trouble repaying (or overdrawn bank accounts).

Direct deposits: Does it pay to get paid faster?

You worked hard for your paycheck. While you may find yourself in a situation where you need money right away, be wary of early pay services that charge you fees or interest to access your own money. Use cash advance or early pay tools very sparingly and only for genuine emergencies. If done routinely, they can cut into your wages in significant ways, making it hard to both pay future bills and catch up on repayment.

Look carefully at the service terms, fees, interest, and how the repayment money gets debited. Build an emergency fund so you can pay for future expenses out of pocket instead of dipping into tomorrow’s paycheck.

You can also ensure you get your money almost immediately after your employer pays it out using early direct deposit features at banks and credit unions. For those without banks, a card like the Netspend^® Prepaid Debit Card helps you load cash¹ onto the card quickly to use at stores, gas stations, and online bill pay. You can even access your paycheck up to two days early² when your employer deposits directly onto your Netspend^® Card Account.