• Startup
  • Payroll/Taxes
  • Human Resources
  • Employee Benefits
  • Business Insurance
  • Compliance
  • Marketing
  • Funding
  • Accounting
  • Management
  • Finance
  • Payment Processing
  • Taxes
  • Overtime
  • Outsourcing
  • Time & Attendance
  • Analytics
  • PEO
  • Outsourcing
  • HCM
  • Hiring
  • Onboarding
  • Recruiting
  • Retirement
  • Group Health
  • Individual Insurance
  • Health Care
  • Employment Law
  • Tax Reform

Help Your Workers Save Money: Split-to-Save Option Enhances Direct Deposit


How good are Americans at saving money? Generally, not good at all.

An astonishing 69 percent of Americans have less than $1,000 in savings, according to a 2016 survey of 7,000 individuals by GOBankingRates. In addition:

  • Only 41 percent of adults say they have enough in their savings account to cover an unplanned expense of $500 or $1,000.
  • About one-third of Americans wonder whether they'll be able to cover basic living costs when they retire.
  • 42 percent of women have nothing reserved in savings, vs. 28 percent of men.

Although many U.S. workers report feeling stressed about retirement, only six in 10 (61 percent) say they have saved for that goal, and only four in 10 have tried to determine how much money they'll need.

These statistics forecast a grim future for millions of Americans.

Why don't Americans save?

We're not good at setting aside funds for a number of reasons, experts say. Among them:

Financial experts recommend having enough money set aside to cover at least six months' worth of living expenses. Ideally, you should also establish savings goals for major purchases such as a car, a vacation, or a home. Having more than one savings account can facilitate this objective.

Employers: Encourage saving with split-to-save option

Employers can play an important role in promoting better savings habits. If your company offers direct deposit of paychecks — electronically sending earned funds right to workers' checking or savings accounts — consider adding a split-to-save feature. Split deposit enables workers to put a fixed amount or a percentage of their paycheck into a savings or investment account each pay period. It's an easy way to help workers manage their finances better and save automatically.

NACHA, the Electronic Payments Association, notes that 82 percent of U.S. workers use direct deposit, but only 24 percent use split deposit.

If your company does not yet provide direct deposit for the workforce, consider the benefits. Direct deposit:

  • Yields cost savings, as your business:

o Reduces the time spent on payroll;

o No longer has to pay $2.87-$3.15 per paper check*;

o No longer must re-issue lost or stolen checks, face stop-payment charges, or hunt for missing checks;

o Experiences less absenteeism, since employees don't have to leave work to deposit or cash their checks; and

o Has checks remotely processed, freeing HR and payroll staff to do other things.

  • Gives employees great convenience, as they:

o Don't have to go somewhere to cash their checks;

o Don't have to be in the office to get paid;

o Control where their money goes — to a checking or savings account, or split between both;

o Can pay bills right away, once the deposit occurs; and

o Have greater electronic security, which deters identity theft.

Moreover, a paperless payroll system is good for the environment. Direct deposit offers peace of mind for employees and employers alike.

Paycard option

The paycard, or payroll card, offers an alternative to direct deposit. A paycard is similar to a debit card. On paydays, an employer loads workers' cards with their wages for that pay period. Employees can use the paycard as they would a debit card to withdraw cash from an ATM or a bank, or use it with merchants to make purchases. They can avoid fees at check-cashing stores. Paycards make direct deposit available to everyone in a company, even those without bank accounts.

For employers, paycards reduce the printing and delivery of paper checks, saving time and money. Many paycard programs offer employers an online portal so they can manage all aspects of the program. But do your research before deciding on a paycard program. You want a partner that best meets the needs of your company and your employees.

Establish payroll options that fit your needs

Conscientious employers don't want to see their workers struggle financially from an inability to save money. Presenting opportunities such as split-so-save direct deposit or paycards can encourage behavior change. Paychex offers a selection of payroll options, including direct deposit, paycards, and traditional paper checks. Choose those that best meet your employees' needs and the operation of your business.


* Source: Potential savings estimates are from NACHA, The Electronic Payments Association. NACHA’s calculation is based on industry averages for over thirty variables and is for directional guidance only. Actual results may vary. NACHA, does not in any way warrant the savings results obtained using this calculation.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.