The introduction of several payment systems has made it easy to send money fast, from anywhere worldwide. One of those unique payment systems is the common direct deposit. Direct deposits are mainly used to pay employees, and this is because it is fast, secure, and very reliable. As an employee, there is a huge chance that you are being paid via direct credit. If that should be the case, I bet you’ll have several questions regarding how it works, and one of those questions would likely be, “How long does a pending direct credit take to post?”
It takes a pending direct deposit from one to five business days to post on your account. The timeframe depends on a factors such as ACH timing, regulation and how fast your bank process the transaction.
As an employee, it is crucial that you know how you are being paid. Don’t only strive to know when the funds will hit your account. Also, find out the payment method your employer uses so that when certain issues arise, you’ll know what to do. Your employer may not give you details of how a direct credit works, so it is left for you to do the legwork and grasp the process. In this article, I’ll reveal how long you should expect this deposit to be held before hitting your account.
How Long Does a Pending Direct Deposit Take?
Payday is on a Tuesday. However, unlike other employers, yours decided to submit the payroll for staff in the company on the payday. 3 PM, you log into your banking app to check if the funds are reflecting but sees no changes. The money is yet to arrive. You become worried and contemplate calling your colleges to check if they have received theirs. You called, it’s the same. They are yet to get their much anticipated $4,000 salary. You consider calling your employer to find out what is wrong.
6 PM, still nothing. Your salary, which is supposed to be paid that day, is yet to reflect in your account. You get super-scared as your mind conjures thoughts of what could have gone wrong. You see, that example depicts some of us. We go through this because we have no idea how direct credit works. Of course, it is done electronically. However, it doesn’t hit your account with lightning speed. Like the typical credit and debit card transactions, a direct deposit pends. However, there is a huge difference between the two.
A direct credit involved a few players or parties. However, credit card transaction processing involves around 4 players. Let us take a crisp look at what a direct credit is to understand better how it works, and from there, you should be able to deduce a few things.
A direct deposit or credit is simply a payment made directly into a payee’s account. The payment is usually made electronically from one account to another rather than the usual traditional method of check deposit. Direct credits are very common among employers, as they use them to pay their employees.
Direct credit adopts an electronic network that allows deposits to occur between banks. This network, widely regarded as ACH (Automated Clearing House), plays a significant role in the direct deposit process.
How It Works?
Company ABC needs to pay its employees on the 24th of each month. To ensure that the process is smooth and timely, the company takes each employee’s banking details and sets up direct deposits.
On the 23rd, the company sends the payroll details to the bank who forwards them to the ACH, assuming the process takes a business day. The Automated Clearing House arranges the payment instructions and ensures that the payment is made to the right bank account. Afterward, the ACH sends the payment to the bank of each employee. The banks receive the payment instructions and process the payment. Normally, the entire process can take one to five business days.
Now, back to our main question of the topic… You see, a pending direct credit takes about three days to hit your account. It could be longer, depending on a few factors. These factors range from how fast your employer submitted the payroll information to the bank, how fast your bank is in processing transactions, and the amount being transferred.
Typically, most employers send the payroll information of their employees a day or two before the payday so that they can all receive their salary in time. If this is the case, then you may receive the funds a day before payday or on the payday. However, if your employer does otherwise, you’ll definitely receive the funds a day or two after payday. It could even be longer if your bank is pretty slow in processing payments.
If you haven’t seen the funds four or five days after payday, don’t hesitate to contact your bank. If your bank can’t help, contact your employer. Probably there was a mistake somewhere.
Can Banks See a Pending Direct Deposit?
Almost everyone who uses a credit or debit card is familiar with the word “pending.” However, I believe not everyone understands the reason behind it. Just like a credit card transaction, a direct credit can be held. If you expect your salary today and it hits your account two days later, the funds were held; that is what we call pending. Now, out of curiosity, you may want to know if your bank sees a pending direct credit.
Of course, your bank can see a pending direct deposit. But they will not apply it to your account until it is scrutinized to ensure that it is funded by the sender’s account in full. As soon as it is verified, the money will reflect in your available balance, ready for use.
Banks control your account, so they see all transactions that you make. There are some that they can alter, while there are others that are beyond their control. They are usually the ones behind a pending direct credit, even a pending credit or debit card transaction. So, of course, they can see a pending direct credit because they are behind it.