Splitting Direct Deposit is the easiest way to save more money

This year experts advise to split your Direct Deposit between your checking and savings accounts if you want to save more money. National Direct Deposit and Direct Payment Month is celebrated annually in May. NACHA’s Marketing Management Group (MMG) coordinates the yearly campaign. The Consumer Federation of America (CFA) conducted a new survey which said that although the significant majority of all employees (66 %) use Direct Deposit, only 23 % of all employees split their Direct Deposit into different accounts. Only 59 % of employees that have access to Direct Deposit and use it have the option to split Direct Deposit. Of those with access to Direct Deposit, only 39 % choose to split Direct Deposit. Of those that don’t have access to Direct Deposit, 76 % said they would use it if they had the option. A 2006 survey by MMG showed that consumers who use Direct Deposit to save for education save $90 more per month than those who use another method to save and $25 more per month when saving for other purposes. The easiest way to start a consistent savings program is to have your employer deposit just enough in your checking account to cover your expenses and bills and have them automatically deposit the rest into your savings account through a split Direct Deposit. Stephen Brobeck, executive director of the CFA, said: “Especially in this economy, every penny counts. Even if you only have $20 left each month after your expenses, deposit it automatically to your savings account. With this type of consistent savings, you will be well on your way to establishing a financial emergency fund, a college savings program or a vacation fund.”