Small Biz Tout Direct Deposit as Savings Channel
A new study has revealed that 71% of small businesses who offer direct deposit provide the option for employees to split their earnings into other accounts as one way to save.
Split deposit means employees put money aside before it hits their checking accounts with the goal of establishing savings on an automatic basis, according to NACHA-The Electronic Payments Association.
The data showed that there is a correlation between the size of the business and the likelihood of the organization providing split direct deposit; the larger the business, the greater the ratio offering split deposit. Eighty-one percent of businesses with 101 or more employees offered split deposit as compared to 65% with two to five employees, the study noted. Seventy-six percent of organizations with revenues of $15 million to $19.99 million offered split deposit and 61% of those with revenues under $500,000 did the same.
NACHA cited data from a Consumer Federation of America study that showed 83% of respondents agreed that the most effective way to build personal savings is to do so automatically by transferring funds regularly from a paycheck or checking account to their savings or investment accounts. A separate study from NACHA concluded that consumers who split their direct deposit save up to $90 more per month than those who use another method to save.