Which Banks Have An Early Direct Deposit Of A Tax Refund? If you’re expecting a tax refund this year, you might be wondering how long it will take to receive it. According to the IRS, the average refund time is 21 days for e-filed returns and six weeks for paper returns. However, some factors can delay your refund, such as errors, fraud, identity theft, or incomplete information.
Fortunately, there is a way to get your tax refund faster than the average time: early direct deposit. Early direct deposit is a feature that some banks offer to their customers, which allows them to receive their direct deposit payments up to two days earlier than the scheduled date. This means that if you normally get your tax refund on Friday, you could see it in your account on Wednesday.
In this article on which banks have an early direct deposit of a tax refund, we will explain how early direct deposit works, which banks offer it, and what are the benefits and drawbacks of using it. We will also answer some frequently asked questions and provide some tips on how to maximize your tax refund.
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How Early Direct Deposit Works: Which Banks Have An Early Direct Deposit Of A Tax Refund?
Early direct deposit is a service that some banks provide to their customers who receive direct deposit payments, such as paychecks, government benefits, or tax refunds. Direct deposit is an electronic transfer of funds from the payer (such as your employer or the IRS) to your bank account, without the need for a paper check or cash.
When you file your tax return, you can choose to receive your refund by direct deposit instead of a paper check. You will need to provide your bank account number and routing number, as well as the type of account (checking or savings). You can also split your refund among up to three different accounts.
The IRS usually sends direct deposit information to banks a few days before the actual payment date. This is because the IRS needs to verify your identity, calculate your refund amount, and process your return. However, since the banks already know that the money is on its way, they can credit your account earlier than the official date. This is what early direct deposit does: it gives you access to your money sooner, based on the information that the bank receives from the IRS.
Not all banks offer early direct deposit, and those that do may have different eligibility criteria and terms and conditions. Some banks may require you to have a certain type of account, a minimum balance, or a direct deposit history. Some banks may also limit the amount of money that you can receive early, or charge a fee for the service. Therefore, it is important to check with your bank before you sign up for early direct deposit.
Which Banks Have An Early Direct Deposit Of A Tax Refund?
Which Banks Have An Early Direct Deposit Of A Tax Refund? According to our web search results, there are several banks that offer early direct deposit of your tax refund, as well as other direct deposit payments. Here are some of them:
Get Your Tax Refund Faster: Which Banks Have An Early Direct Deposit Of A Tax Refund:
1. Axos Bank
Axos Bank is an online-only bank that offers early direct deposit for free to its customers. You can receive your direct deposit payments up to two days early, regardless of the amount or the type of account you have. Axos Bank also offers a high-yield checking account that pays 3.30% APY and has no overdraft or nonsufficient funds fees1.
2. Ally Bank
Ally Bank is another online-only bank that offers early direct deposit for free to its customers. You can receive your direct deposit payments up to two days early, as long as you have an Ally Interest Checking account. This account pays 0.25% APY and has no overdraft fees. You can also enroll in overdraft coverage if you meet certain requirements.
3. Capital One
Capital One is a traditional bank that offers early direct deposit for free to its customers who have a 360 Checking account. You can receive your direct deposit payments up to two days early, depending on your balance and the type of payment. This account pays 0.10% APY and has no overdraft fees. However, Capital One determines whether or not to cover your transaction, and if so, you will need to transfer money to cover it.
4. Chase Bank
Chase Bank is another traditional bank that offers early direct deposit for free to its customers who have a Chase First Banking account. This account is designed for kids and teens, and it allows them to receive their direct deposit payments up to two days early. This account has a $4.95 monthly fee and no interest. If your account is overdrawn by at least $50 and it’s not covered by the next business day, there’s a $34 insufficient funds fee.
5. Chime Bank
Chime Bank is a banking financial tech firm that offers early direct deposit for free to its customers. You can receive your direct deposit payments up to two days early, regardless of the amount or the type of account you have. Chime Bank also offers a high-yield savings account that pays 2.00% APY and has no overdraft fees. You can also enroll in SpotMe to have up to $200 in overdraft coverage.
6. Fifth Third Bank
Fifth Third Bank is a traditional bank that offers early direct deposit for free to its customers who have a Fifth Third Momentum Checking account. You can receive your direct deposit payments up to two days early, regardless of the amount or the type of payment. This account has no monthly fee or minimum balance requirement. However, there are several overdraft protection options, but there’s a $37 overdraft fee and a $25 extended overdraft fee.
7. LendingClub Bank
LendingClub Bank is an online-only bank that offers early direct deposit for free to its customers who have a Rewards Checking account. You can receive your direct deposit payments up to two days early, regardless of the amount or the type of payment. This account pays up to 1.00% APY and has no monthly fee or minimum balance requirement. It also has no overdraft fees and offers cash back rewards on debit card purchases.
8. SoFi Bank
SoFi Bank is a banking financial tech firm that offers early direct deposit for free to its customers who have a SoFi Money account. You can receive your direct deposit payments up to two days early, regardless of the amount or the type of payment. This account pays 2.25% APY and has no monthly fee or minimum balance requirement. It also has no-fee overdraft coverage, and SoFi covers up to $50 when you set up qualifying direct deposits.
9. Varo Bank
Varo Bank is another banking financial tech firm that offers early direct deposit for free to its customers. You can receive your direct deposit payments up to two days early, regardless of the amount or the type of account you have. Varo Bank also offers a high-yield savings account that pays up to 3.00% APY and has no monthly fee or minimum balance requirement. It also offers Varo Advance, which gives you a $20 advance, but fees apply after that.
These are some of the banks that offer early direct deposit of your tax refund, according to our web search results. However, this is not a comprehensive list, and you should always check with your bank or credit union to see if they offer this feature and what are the terms and conditions.
Benefits and Drawbacks of Early Direct Deposit
Early direct deposit can be a convenient and beneficial feature for many people, especially those who need their money as soon as possible. However, it also has some drawbacks that you should be aware of. Here are some of the pros and cons of early direct deposit:
Benefits
- You can get your money faster: The main benefit of early direct deposit is that you can access your money sooner than the official payment date. This can help you pay your bills, cover your expenses, or save for your goals faster. It can also reduce the stress and anxiety of waiting for your money to arrive.
- You can avoid fees and interest: Another benefit of early direct deposit is that you can avoid fees and interest that you might incur if you use other methods to get your money faster, such as payday loans, cash advances, or overdrafts. These methods can be very expensive and risky, and they can trap you in a cycle of debt. Early direct deposit can help you avoid these costs and risks, and save you money in the long run.
- You can earn more interest: A third benefit of early direct deposit is that you can earn more interest on your money if you deposit it in a high-yield account, such as a savings account, a money market account, or a certificate of deposit. The sooner you deposit your money, the sooner it starts earning interest, and the more interest you can accumulate over time. This can help you grow your money faster and reach your financial goals sooner.
Drawbacks
- You may not get your money early every time: One of the drawbacks of early direct deposit is that it is not guaranteed, and it depends on several factors, such as your bank, your payer, and the type of payment. Sometimes, your bank may not receive the information from the payer early enough to deposit your money early, or they may have technical issues or delays. Sometimes, your payer may not send the information to your bank at all, or they may send it later than usual. Therefore, you should not rely on early direct deposit as your only source of income, and you should always have a backup plan in case you don’t get your money early.
- You may have trouble budgeting: Another drawback of early direct deposit is that it may make it harder for you to budget your money, especially if you have a fixed income or irregular expenses. If you get your money early, you may be tempted to spend it before your bills are due, or you may forget to set aside enough money for your future payments. This can lead to overspending, under-saving, or missing payments. Therefore, you should always track your income and expenses, and stick to a budget that works for you.
- You may have to pay taxes on your interest: A final drawback of early direct deposit is that you may have to pay taxes on the interest that you earn on your money, depending on your tax bracket and the type of account you have. Interest income is generally taxable at your ordinary income tax rate, unless it is from a tax-exempt account, such as a Roth IRA or a municipal bond. Therefore, you should always consult a tax professional or use a tax calculator to estimate your tax liability and plan accordingly.
Frequently Asked Questions About Which Banks Have An Early Direct Deposit Of A Tax Refund?
Here are some of the common questions that people have about which banks have an early direct deposit of a tax refund:
How do I sign up for early direct deposit?
To sign up for early direct deposit, you need to have a bank account that offers this feature, and you need to provide your bank account information when you file your tax return. You can use the IRS Free File program or a tax software to e-file your return and choose direct deposit as your refund method. You will need to enter your bank account number, routing number, and account type. You can also split your refund among up to three different accounts.
How do I check the status of my tax refund?
To check the status of your tax refund, you can use the IRS Where’s My Refund tool or the IRS2Go mobile app. You will need to enter your Social Security number, filing status, and exact refund amount. You can start checking your refund status within 24 hours after you e-file your return, or four weeks after you mail your paper return. The tool will show you the date when your refund is approved and sent, as well as the date when you can expect to receive it.
How can I get my tax refund faster?
To get your tax refund faster, you can do the following things:
- File your tax return as early as possible, preferably in January or February, before the tax season rush.
- E-file your tax return instead of mailing a paper return, as e-filing is faster and more secure.
- Choose direct deposit instead of a paper check, as direct deposit is faster and safer.
- Use a bank account that offers early direct deposit, as you can get your money up to two days earlier than the scheduled date.
- Avoid errors, fraud, identity theft, or incomplete information on your tax return, as these can delay your refund.
- Claim the Earned Income Tax Credit or the Additional Child Tax Credit, as these can increase your refund amount.
Conclusion: Which Banks Have An Early Direct Deposit Of A Tax Refund?
Axos Bank, Ally Bank, Capital One, Chase Bank, Chime Bank, Fifth Third Bank and so on are banks that offer direct deposit payments, such as tax refunds. It allows them to access their money up to two days earlier than the official payment date, which can help them pay their bills, cover their expenses, or save for their goals faster. It can also help them avoid fees and interest that they might incur if they use other methods to get their money faster, such as payday loans, cash advances, or overdrafts. It can also help them earn more interest on their money if they deposit it in a high-yield account.
However, early direct deposit is not guaranteed, and it depends on several factors, such as the bank, the payer, and the type of payment. Sometimes, the bank may not receive the information from the payer early enough to deposit the money early, or they may have technical issues or delays.
We hope that this article on which banks have an early direct deposit of a tax refund has helped you understand how early direct deposit works, which banks offer it, and what are the benefits and drawbacks of using it. If you have any questions or comments, please feel free to leave them below. Thank you for reading!