Direct Deposit Offers Your Customers Safety, Convenience and Economy

By Merello, Bill | Independent Banker, January 1995 | Go to article overview
Save to active project

Direct Deposit Offers Your Customers Safety, Convenience and Economy


Merello, Bill, Independent Banker


The Financial Management Sere (FMS) of the U.S. Department of the Treasury provides a program for receiving federal payments that is safe, convenient and economical. It's called the Direct Deposit Program. The Direct Deposit Program allows the federal government to make payments by electronic funds transfer (EFT), through the automated clearinghouse system, directly to financial institutions for deposit to a checking or savings account.

In January 1976, FMS made its first use of the EFT system to issue Social Security benefit payments in the state of Georgia. That year, 660,000 payments were made by EFT. Currently, approximately 27.1 million payments per month are being made by EFT. This represents approximately 53 percent of all benefit payments made by the federal government.

Now's a Good Time

The program has grown steadily. The recently revised Title 31 Part 206 of the Code of Federal Regulations requires federal agencies to use the most cost effective and efficient disbursement method available. This regulation, together with recently enacted legislation requiring all new federal employees and retirees to use direct deposit to receive their salary or annuity payments, will have a significant positive impact on the rate of increase in participation and makes now an ideal time to actively market the program in your bank's service area. The new legislation takes effect this month.

By encouraging your customers to receive their federal payments by direct deposit, you are providing them with a safe and convenient banking service. Direct deposit eliminates the hip to your financial institution to cash or deposit a check, and it eliminates the possibility of the check being lost or stolen.

In addition, the program provides definite benefits for you, the financial institution. It reduces lobby congestion, improves customer service, and increases the use of other services. But, best of all, an EFT payment costs less to process. Studies have revealed that it costs 59 cents to process a mail deposit and 24 cents to process a check cashed over the counter. But, it costs only 7 cents for financial institutions to process an EFT payment.

To help you and your customers take advantage of the benefits of the Direct Deposit Program, the FMS continues to conduct one of the most wide-ranging public service campaigns ever.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Direct Deposit Offers Your Customers Safety, Convenience and Economy
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?