NACHA

April 03, 2007 10:11 ET

Survey Finds Savings Increase $90 Monthly When Consumers Save Electronically

HERNDON, VA.--(Collegiate Presswire - April 3, 2007) - According to a consumer survey completed late last year, consumers who use direct deposit or direct payment to add to their savings accounts save $90 more per month than those who use another method to save.

However, the survey, commissioned by NACHA's Marketing Management Group (MMG), showed that only 36 percent of respondents use direct deposit or direct payment to save. The majority saved by depositing checks or cash (41%) or by manually transferring money between accounts (13%).

"People who save using electronic payments are usually more consistent and committed savers," said Diane Freeman, 2007 chairman of MMG and FedACH product manager at the Federal Reserve Bank of Atlanta. "Once you set up direct deposit or direct payment, the money goes into your savings account automatically each month. You are less likely to notice the deduction if this happens automatically versus manually.

"Most employers will split direct deposit of an employee's pay into several different accounts including a savings account," continued Freeman. "If an employer doesn't offer this, financial institutions can set up electronic transfers of money from checking accounts into savings accounts via direct payment."

MMG, led by NACHA, Electronic Payments Network (EPN) and the Federal Reserve Banks, is sponsoring Direct Deposit and Direct Payment Month in May to encourage financial institutions and businesses to actively promote this message to their customers and employees. Employees can also play a role by asking for these services from employers, investment companies and financial institutions.

Most people who are offered direct deposit for their pay use it. However, many small and medium-size businesses don't use direct deposit to pay their employees. "We encourage employees to ask their employers, regardless of size, to offer direct deposit. It should be a component in every employee's benefits package," said Freeman.

Additional information about direct deposit and direct payment, including how to approach an employer about offering direct deposit, can be found at www.electronicpayments.org.

Contact Information