Direct Deposit Flat Dollar Amount?

Question

I'm setting up a direct deposit account for the first time since I opened a checking account. It's wanting a flat dollar amount value. Is that the smallest value of money they can leave in my account?

Answer 1

There are two different types of "direct deposit".

There is a "savings plan" direct deposit, which sets up a fixed amount to be transferred into an account on a fixed schedule. The flat dollar amount is the amount to be transferred (not the minimum balance). This sounds like what you have signed up for. Be careful as there is no smallest value in a bank account and you can go negative (whereupon the bank will penalize you).

There is also the direct deposit where the whole amount is transferred into an account. A typical varation of this type of account is the one where your entire net paycheck is deposited into your bank.

How do you know which one you have (apart from asking)? Easy. If you set it up directly with your bank, then it is more likely than not to be the former. If you set it up with your employer, then it's likely to be the latter.