Wells Fargo Now Doing Early Access to Direct Deposit

[Petunia 100]

My checking account is with Wells Fargo. I was notified that they are going to start providing early access to direct deposits, up to 2 days early. It seems like they are trying to compete with Chime. Yesterday I noticed that my paycheck for today was already available. In the past, I wouldn't even see it until payday.

If Wells Fargo is doing this, it is only a matter of time before other big banks start doing it too.

[kork13]

For the longest time, this "feature" was fairly unique to just a few banks. USAA has done this for at least a decade. A handful of years ago, Navy Fed started doing it as well. In the last 6-ish months, Ally joined the party too. I'm not surprised others are as well.

It's not really hard either -- payroll processes require direct deposit payments to be in the system up to a week ahead of time. Though really, it's never mattered much to me... The check is coming, just a question of today or tomorrow.

[Jluke]

I belong to a credit union.

The last year or two I can see my paycheck pending on Wednesday night around 9pm.

It’s not available until Friday around 6am.

but maybe that will change.

[MonkeyMama]

Our credit union has always done this. They skip the "pending" stage, apparently. Any ACH deposits will show up in my account early (e.g. tax refunds or bank transfers).

The flip side of the coin is that direct deposit is getting easier/faster. I always got comments about not having direct deposit at my last job. We did not use direct deposit for most of our clients. It was too cumbersome and we wanted more flexibility to do last minute owner paychecks, etc. & I recall shopping around a few times over the years and it was always way too much lead time to run payroll. Now... Quickbooks will do direct deposit in one day. That is when I stopped getting my direct deposits early (this happened probably in the past year). Payroll is submitted the night before and all the bank transfers now happen the day of payroll. Faster payroll process times will make some of these early deposits moot.

[disneysteve]

So how does this work exactly? Let's say I get paid on Fridays. Does this mean I would now effectively get paid on Wednesdays? If so, what difference does that really make? It's still every 2 weeks. I wouldn't be getting any more money. I'd just be getting it on a different day. I'm failing to see any possible benefit to this.

[kork13]

So how does this work exactly? Let's say I get paid on Fridays. Does this mean I would now effectively get paid on Wednesdays? If so, what difference does that really make? It's still every 2 weeks. I wouldn't be getting any more money. I'd just be getting it on a different day. I'm failing to see any possible benefit to this.

Yep, exactly. Doesn't really change anything, it's almost just a novelty.

[Petunia 100]

To some people, it is a really big deal.

[kork13]

To some people, it is a really big deal.

I get what you're saying, but even for folks who are scaping by paycheck-to-paycheck (or less), having their paycheck arrive a couple days early does mean they have earlier access to their income, but it'll also likely run dry those same couple days early as well. So it's no net gain.

[disneysteve]

To some people, it is a really big deal.

Why? What possible difference does it make if your payday changes from every other Friday to every other Wednesday? What am I missing here?

[disneysteve]

I get what you're saying, but even for folks who are scaping by paycheck-to-paycheck (or less), having their paycheck arrive a couple days early does mean they have earlier access to their income, but it'll also likely run dry those same couple days early as well. So it's no net gain.

It’s only early the very first time it happens. From then on, it’s every 14 days just like always. It’s just on a different day than it used to be.

[Petunia 100]

I get what you're saying, but even for folks who are scaping by paycheck-to-paycheck (or less), having their paycheck arrive a couple days early does mean they have earlier access to their income, but it'll also likely run dry those same couple days early as well. So it's no net gain.

Agreed, there is no net gain.

[Petunia 100]

Why? What possible difference does it make if your payday changes from every other Friday to every other Wednesday? What am I missing here?

There are a lot of people out there who are financially illiterate. If you have $0 cash and a bill due right now, or no gas in your tank, or whatever, getting your paycheck 2 days sooner is a big deal.

If everyone had the ability to plan ahead with their money and expenses, payday lenders wouldn't exist.

[disneysteve]

There are a lot of people out there who are financially illiterate. If you have $0 cash and a bill due right now, or no gas in your tank, or whatever, getting your paycheck 2 days sooner is a big deal.

Sure, but it's only 2 days sooner the very first time it happens, and it just means they'll run out of money 2 days sooner. After that first time, it will be exactly the same as always.

Let say they get paid every Friday. Going forward they'll get paid every Wednesday instead. Same amount of money on the very same schedule, just on a different day. If they usually run out of money by Thursday, now they'll run out by Tuesday. This doesn't do anything to change their ability to pay that bill or put gas in the tank.

This is purely a marketing ploy by the banks doing it. It does absolutely nothing to benefit the customer. It doesn't harm them in any way either, so I've got no problem with them doing it. It's just a simple shift of your pay day. As said, no net gain or loss either way.

[rennigade]

Banks are now competing for the most financially illiterate customers.