New Survey However Shows Access to Direct Deposit Split is Limited
HERNDON, Va. – February 18, 2009 – The America Saves campaign has a simple message this year – split your Direct Deposit into your checking and savings account if you want to save more money. The coalition celebrates “America Saves Week” from Feb. 22 – March 1. The Consumer Federation of America (CFA) is the managing partner for the campaign.
According to a new survey by the CFA, although 66% of all employees 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.
“Many companies don’t offer their employees the option to split Direct Deposit,” said Stephen Brobeck, executive director of the CFA. “They are denying their employees a basic benefit that doesn’t cost the company any more to offer and can potentially help their employees start consistent savings programs.”
A 2006 survey by NACHA – The Electronic Payments Association showed that consumers who use Direct Deposit save $90 more per month than those who use another method to save. NACHA suggests 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 have them automatically deposit the rest into your savings account through a split Direct Deposit.
“Just like retirement savings, if you automatically save the money, you are less likely to spend it,” said Jan Estep, president and CEO of NACHA. “Splitting Direct Deposit is easy to set up for new employees or established Direct Deposit users. The process takes minutes to complete. Just talk to your employer.”
The CFA is working in partnership with NACHA and the American Payroll Association to promote this message during “America Saves Week.” The group also will endorse this message during Direct Deposit and Direct Payment Month in May and National Payroll Week from Sept. 7-11.
“It’s a win-win situation. Direct Deposit helps employees save money and it’s free for employers to offer this benefit,” said Dan Maddux, executive director of the American Payroll Association. “During America Saves Week employees should ask their payroll departments about Direct Deposit splitting options and should suggest adding the benefit if it isn’t offered yet. Employers can do their part by encouraging their employees to save more by splitting their Direct Deposit between checking and savings accounts.”
The CFA survey showed that 66% of all employees use Direct Deposit. Of those that have access to Direct Deposit, 78% use it. Of those that don’t have access to Direct Deposit, 76% said they would use it if they had the option.
“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, college savings program or a vacation fund,” concluded Brobeck.
America Saves is a nationwide campaign in which a broad coalition of nonprofit, corporate, and government groups help individuals and families save and build wealth. Through information, advice, and encouragement, the coalition assists those who wish to pay down debt, build an emergency fund, save for a home, save for an education, or save for retirement. Overall management for the campaign is being provided by the nonprofit Consumer Federation of America (CFA). CFA is a federation of some 300 consumer education, advocacy, and cooperative organizations dedicated to advancing the consumer interest.
National Payroll Week celebrates everyone’s favorite day – payday. It recognizes the unique partnership among America’s workers, their companies, the payroll professionals who pay them and critical government programs like social security, Medicare and fair labor standards. Together, through payroll withholding, payroll professionals collect and contribute 64.2 percent of U.S. Treasury revenue. The American Payroll Association founded National Payroll Week in 1996.
NACHA — The Electronic Payments Association is a not-for-profit association that oversees the Automated Clearing House (ACH) Network, one of the largest electronic payment networks in the world. More than 18 billion ACH payments were exchanged in 2007. NACHA is responsible for the administration, development, and enforcement of the NACHA Operating Rules and sound risk management practices for the ACH Network. Through its industry councils and forums, NACHA brings together hundreds of diverse payments system stakeholder organizations to enable the development of new network services and applications. NACHA represents more than 11,000 financial institutions through direct membership and 19 regional payments associations. NACHA and its members provide education, tools, and resources to increase the adoption of ACH payments to benefit businesses, consumers, and governments. To learn more, visit www.nacha.org and www.electronicpayments.org.