Direct Deposit

A method of electronically transferring funds from an organization, such as an employer or government agency, into an individual's bank account.

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A direct deposit is a way to electronically transfer money from an organization, such as an employer or government agency, into an individual's bank account. Direct deposit is a convenient and secure way to receive payments, as it eliminates the need to receive a physical check or cash and deposit it into your account.

Example

You just started a new job, and instead of receiving a physical paycheck, you opt into direct deposit, meaning your paycheck is automatically transferred to your bank account electronically.

Related Terms

Disbursement

The release of funds from an account for the purpose of making a payment or meeting a financial obligation.

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Club Account

A type of savings account that is managed by a group of individuals for the purpose of saving money for a specific goal or event.

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Residual Interest

The interest that accumulates on a loan or credit card balance when it is not paid off in full from one billing period to the next.

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