About Direct Deposit Programs

Direct deposits are a fast, convenient, and safe way to get your money. Checks are electronically sent to your bank account, which can mean less time in bank lines. Employers benefit by saving money on check printing and stamps. Direct deposit has also reduced anticipation time for people due a tax refund. A direct deposit refund can go into an account in a matter of days instead of weeks.

What Is the Meaning of FBO on a Direct Deposit Form?

The acronym FBO on a direct deposit form stands for "For the Benefit of." If the funds are for you, write your name after the FBO. You aren't listing a beneficiary or naming a person paid upon death; it just gives the company permission to deposit the check into your bank account on your behalf.

Can Direct Depositers Withdraw Without Your Permission?

Direct depositors can only put money in your account; you don't have to worry about them dipping into it for their own purposes. Only authorized users can withdraw funds from a private account, and your employer or the government don't count. However, if your employer pays you too much, he can reverse the payment without notifying you. Even so, he'll have to do that within five business days of the deposit.

Can a Mailed Tax Return Be Direct Deposited?

You can ask for the direct deposit option even if you file by mail. It typically takes the IRS four to six weeks to process mailed returns and issue refunds. If you submit your return electronically, the funds are generally deposited in your account within two weeks. The numbers on the check have to match those on your bank routing number. If they don't, the deposit attempt will fail the IRS validation check, and you'll get the paper check.

How Long Does it Take for a Direct Deposit to Be Posted?

The turn-around time depends on the bank. For example, Wells Fargo claims it gets the deposit and adds it to the customer's account on the same day. TD Bank posts direct deposits on the same business day it's scheduled to be credited by the issuing bank. If they get it on a Sunday or holiday, it's posted on the next available business day. PNC Bank makes funds available the day of deposit.

Can You Direct Deposit Anyone's Tax Return in Your Checking Account?

According to the IRS, you can only deposit your refund to your own account. Even with permission from the taxpayer, the bank can reject the payment if the name on the return doesn't match the account. If the bank rejects the deposit, the IRS mails the refund instead.


About the Author

Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.