Early Direct Deposit Command Center

It provides employees and government transfer recipients access to their direct deposits up to two days early. The financial technology company Chime offered early direct deposit in 2015 and was followed by other digital banking services. Now regional and money center banks such as Chase and Wells Fargo offer it as well.  

When an employer or its agent releases the payroll, it is essentially issuing payroll instructions to its bank. These instructions come in the form of a file which includes a payment date for when direct deposits are available in employee bank accounts. The file is passed from the originating bank, known as the Originating Depository Financial Institution (ODFI), to the Automated Clearing House (ACH) network and then to the employee’s receiving bank, known as the Receiving Depository Financial Institution (RDFI). Typically, with direct deposit, the payment date would be two business days after payroll is run. For instance, if the employer finalized and released payroll on Wednesday with a payment date of Friday, then the receiving bank (RDFI) would credit the employee’s account on Friday, usually by 6:00 am. However, if the RDFI offers early direct deposit, funds could post to the employee’s account as soon as the RDFI receives the file from the ACH network (often 24-36 hours before the payment date). 

RDFIs receive those instructions (the ACH file) in advance and view settlement risk as negligible according to Nacha, the operator of the ACH network. As a result, many RDFIs will offer early direct deposit as a perk to attract and retain users. Workers often have bills due a day or two before payday. Early direct deposit is a simple and free service for workers to pay their bills on time so they can avoid late fees and unnecessary added debt. If workers run out of money or have to pay bills in advance of their payday, early direct deposit allows them to buy groceries when their accounts would otherwise be empty. For non-exempt workers, many of whom are frontline workers, the early deposit has become a critical part of their pay experience. It can help them budget more effectively, giving them early insight into paycheck size. Some more savvy workers may even use early direct deposit to enhance their interest income or accelerate their investments. 

Early direct deposit and earned wage access (EWA) are both financial services that offer employees access to their wages, but they differ in their flexibility and timing. Early direct deposit provides funds a few days before the usual payday, while EWA allows on-demand access to wages as they are earned.

What’s good for the workforce is good for the employer. Financially insecure workers are twice as likely to be job searching and early access to paychecks is an easy first step towards financial wellness. Even better, it is typically free and has zero impact on payroll. It is often used as a complement to Earned Wage Access with similar employer benefits. 

If payroll is run later than usual, then employees won’t receive their early direct deposits quite as early. This can cause some frustration and confusion among employees who had been accustomed to much earlier arrival times. In these instances, payroll could be inundated with inquiries and perhaps upset employees.  

The rules are the same. An ACH reversal must be submitted within five business days of the payment date, regardless of whether the employee has early direct deposit or not. Reversals are rare and cover incorrect recipients, amounts or dates. If there are insufficient funds available at the time the reversal is processed, such funds would not get credited back to the employer. 

Not all banks or neo-banks offer early direct deposit. For those that do, the service is free, but the checking account that an employee must have may have fees, such as account maintenance fees. Also, some banks or neobanks are integrated with other financial wellness tools like free overdraft and earned wage access. This can eliminate access fees and provide better visibility into net take-home pay. 

No. The employer’s bank will release the funds at the same time, regardless of whether some employees have early direct deposit or not. 

Delays can occur due to bank holidays, employer payroll processing schedules, or issues in the ACH network. Other employees who do not have early direct deposit are expected to receive their deposits by [Insert Your Payroll Settlement Date]. If you do not receive your funds by then, please notify your financial institution.

Scenario 1: Employee doesn’t have early direct deposit

If your financial institution doesn’t offer early direct deposit, other employees are probably getting their paycheck earlier because they do have early direct deposit. Early direct deposit can provide access to their paychecks up to two days early. 

Scenario 2: Employee recently enrolled in early direct deposit

Depending upon where you bank, it can take a couple of pay periods after you enroll for you to get early direct deposit.

Scenario 3: Employee has been enrolled in early direct deposit for more than two pay periods

Not all early direct deposits arrive at the exact same time. Some financial institutions like Chime make funds available to your account as soon as possible after your payment information is processed through the ACH network. Other financial institutions may take longer.

Scenario 4: Employee still hasn’t received early direct deposit by payday

You may want to double-check your direct deposit instructions to ensure that your account and routing numbers are correct. If they are, you may want to notify your banking provider that the funds have not arrived.

Delays can occur due to bank holidays, employer payroll processing schedules, or issues in the ACH network. Other employees who do not have early direct deposit are expected to receive their deposits by [Insert Your Payroll Settlement Date]. If you do not receive your funds by then, please notify your financial institution.

When payroll is run, your financial institution will receive a notification that the money is on its way. With early direct deposit, your account gets credited before the money officially arrives. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. Financial institutions that offer early direct deposit generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

No, early direct deposit enables you to receive your paycheck up to two days early while earned wage access allows you to access some of your earned but unpaid wages before your scheduled payday. This means you can get some of the money you’re already worked for, when you need it, without waiting for your official payday. Some providers like Chime offer both early direct deposit and earned wage access.

Chime^® is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. MyPay® line of credit provided by The Bancorp Bank, N.A. or Stride Bank, N.A. MyPay services provided by Chime Capital, LLC (NMLS ID 2316451).
¹ Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.