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How Early Direct Deposit Can Boost Your Financial Health

August 1, 2018

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Ah, payday. You’re not alone if it’s the financial highlight of the month or every two weeks—a cherished and needed compensation for your time. And of course, pay those bills and save money for the future.

So what if we told you we could make payday come sooner?

At Varo, we’ve implemented Early Direct Deposit, allowing you to access your hard-earned paycheck up to two days early.*

We know you’ve got bills to pay, and that quicker access to your funds can make a real difference.

First things first

First, you need to apply and open a Varo Bank Account. It’s easy to apply—it takes less than five minutes to do and it’s right in the app. Click the Varo card at the bottom of the post if you don’t have the app.

Next, set up your direct deposit. Setting up direct deposit typically involves filling out a simple form—from your employer or another payor—that includes your Varo Bank Account number and routing number.

How does Early Direct Deposit work?

Every pay period, your employer electronically submits employee payroll files to the Federal Reserve.

The Federal Reserve then notifies your bank of a) your paycheck amount and b) when it’s set to be received. While banks have traditionally waited until the date specified to deposit your funds, Varo can — and does — make that money available to you right away.

If you’re paid on Fridays, for example, Varo typically receives the Federal Reserve’s alert regarding your paycheck on the preceding Wednesday. This means we can provide you access to your earnings up to two days early.*

Varo is able to move up your payday by trusting in your employer’s ability to make payroll. We're taking on this risk in order to get you your paycheck as soon as possible. You work hard for your money — why should you have to wait any longer than necessary to receive it?

More flexibility for you

For many, the end of the pay period can create a major financial headache. It’s a real bummer when your bills are due today, but your paycheck won’t hit your account until the week’s end.  

With 82% of American workers receiving their pay via direct deposit, there are clear benefits to paying out these funds more promptly.

Earlier pay means more flexibility around your financial planning and a headstart on your month’s spending and savings goals.

More interest earned

It also means more interest earned. You get paid earlier*, you can get invested or into savings sooner—and that means more days ‘in the market.’ It may not feel like a significant amount of money in any given pay period, but over time those pennies will add up.

And more, it’s about reinforcing an important mindset — your money works for you, not the other way around.

At Varo, we’re committed to helping you take control of your finances. We hope that by getting you your paycheck sooner*, you can better leverage your hard-earned cash — and head into your weekend feeling financially empowered.

This article was written by Cortnay Cymrot, a contributing writer for Varo.

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