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Benefits of Direct Deposit
By Glenn Ruffenach, The Wall Street Journal
July 31, 2005
Uncle Sam is about to start a national campaign to urge more Americans to use direct deposit for their benefit checks. Here's how to jump on board.
The campaign, called Go Direct, is an effort by the Treasury Department and the Federal Reserve to make it easier and safer for recipients of Social Security and Supplemental Security Income to get their monthly payments -- and in doing so, save the government millions of dollars in postage, printing and related costs.
Currently, the Treasury Department mails about 160 million benefit checks a year, which translates into $100 million in printing and mailing expenses. In about 2½ years, the first of 77 million baby boomers will become eligible for Social Security benefits, which could cause the number of mailings and related costs to soar.
In March, federal officials completed a six-month pilot campaign, also called Go Direct, in three states and Puerto Rico to determine how best to motivate people to switch to electronic transfers of money to their bank accounts.
The key: enlisting the help of local organizations and businesses -- including more than 13,000 volunteers at banks, senior centers and health and consumer groups -- to spread the word.
One on One
In Houston, for example, Neighborhood Centers Inc., a community-support program, held meetings at which seniors could meet and talk with bank representatives to learn about direct deposit.
In these one-on-one discussions, says Orlanda Martinez, a lead specialist at Neighborhood Centers, all the concerns about direct deposit -- how and when money would be placed in accounts, and exactly when funds would be available -- would come tumbling out.
Gradually, though, "people would start to understand," Ms. Martinez says. "They would say, 'OK, I don't have to worry about staying home, waiting for my check.' Or, 'I don't have to worry about someone stealing my check.' That kind of [knowledge] provides a lot of relief."
In all, the pilot campaign "far exceeded expectations," says Kathleen Paese, a vice president at the Federal Reserve Bank of St. Louis. A new call center alone, where people can dial an 800 number to register for direct deposit, resulted in more than 32,000 enrollments. (Total numbers from the pilot are still being tallied.)
Across the Country
The next step: the nationwide campaign. Donald Hammond, fiscal assistant secretary in the Treasury Department, says the formal announcement will come in September, with the campaign itself starting shortly thereafter. The program could last as long as three years, he says; the exact timing as to when various cities and states will first get involved is still being worked out.
"We want to show people that direct deposit is a safe, secure and convenient way to receive payments," Mr. Hammond says. "We also want to save money for Social Security; all the savings [from people switching to direct deposit] go right back into the Social Security program."
If you receive federal benefits, there are four ways to sign up for direct deposit:
. Telephone: Call 1-800-333-1795 (English) or 1-800-333-1792 (Spanish). During the pilot program, people who called the 800 number to enroll spent an average of just 4½ minutes on the telephone.
. Bank or credit union: Tellers in financial institutions can help people fill out forms authorizing direct deposit of federal benefit payments.
. Local Social Security office: Make an appointment or drop in. Social Security officers can help you sign up for direct deposit.
. By Mail: You can print out an enrollment form from the Web site for the Treasury Department's Go Direct campaign, at www.godirect.org1 (English) or at www.directoasucuenta.org2 (Spanish).
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