Direct Deposit
- The FDIC was created to provide a federal government guarantee of deposits. The guarantee says an employee's money, within certain limits, would be safe. Insurance is more critical because the current financial crisis has made more financial institutions and thus employees vulnerable. Federally insured institutions provide a safe way to hold and build liquidity, such as for a rainy day fund.
- Federally insured institutions can offer advantageous means of borrowing, decreasing the pressure or need to borrow against the company pensions. Being customers of federally insured financial institutions make it possible to utilize their financial services, such as IRA or other saving instruments that can further help employees save for retirement.
- Federally insured financial institutions can be a source of information and advice, helping remedy lack of financial literacy.
- Direct deposit is safer; checks won’t get lost in the mail, or elsewhere. Employers will save money by lowering administrative costs.
- Direct deposit often qualifies employees for other benefits, such as a free checking account, or a lower minimum balance.
Click here to go to our companion page for Direct Deposit for your employees.
Click here to go to the next topic, Financial Planning, to see what your company can do to help employees plan their futures.
About the Financial Literacy Center
The FLC's mission is to develop and test innovative programs to improve financial literacy and promote informed financial decisionmaking.
With support from the Social Security Administration, the Center was established in October 2009 by the RAND Corporation, Dartmouth College, and the Wharton School of the University of Pennsylvania in order to develop educational tools and programs that help individuals prepare for their long term financial stability.
About the Program
Presented by the Financial Literacy Center, a joint center established by the RAND Corporation, Dartmouth College, and the Wharton School of the University of Pennsylvania in order to develop educational tools and programs that help individuals prepare for their long-term financial stability.
Success Stories
Take a look at how companies like Mandarin Oriental Hotel Group and Nationwide have had success with automatic enrollment and automatic escalation.
The Dartmouth Project
Increasing employee participation in retirement plans has always been a challenge.
However, researchers at Dartmouth College, through a grant provided by the National Endowment for Financial Education, show that specific low-cost strategies succeed in boosting employee participation rates.
