In deposit terminology, the term Direct Deposit refers to the deposit of money made into a bank account directly from an employer to an employee. Direct Deposit also includes tax refunds.
For example, Direct Deposit can be used to deposit funds into a checking, savings or other type of account upon prior arrangement with the employer and the employee’s bank. Once arrangements have been made, the employer automatically transfers the employee’s wages directly into their bank account without any physical money or check changing hands. Direct Deposit has many advantages, especially for retired and elderly people that can save themselves the trouble of dealing with depositing their social security checks and having to visit their bank. In addition, the United States government uses Direct Deposit to send taxpayers their refunds during tax season.