Is it possible to arrange direct deposit between two individuals?

November 9, 2009 10:43 AM

How can I, an individual (not a business), automate a regular monthly payment to another individual (not a business) so that the payment is moved from my bank account into theirs? It can't involve issuing a paper check to the recipient which they then deposit--it needs to go straight to their account.

Currently I have a supply of their deposit slips and just send the payment directly to their bank, but it's the only paper check I have to write, so I'd really like to automate it.

posted by HotToddy to Work & Money (19 answers total)

Are you in the US? You don't say.

You can do an ACH transfer (a "wire transfer"). But they take a fee. And it's not a small fee, either.

I'm not sure if it can be automated. You'd need to talk to your bank about that. My initial guess would be not, though.
posted by Netzapper at 10:47 AM on November 9, 2009

In which country and with which bank? I'm asking because in the country I live in, you just can with almost every bank account. It's called a standing order.
posted by oxit at 10:48 AM on November 9, 2009

ACH and wire aren't the same--fees for ACH are usually not that bad ($3/transaction at most banks, free at some), but not all banks offer it, especially to accounts held by other people. Some banks will offer the service at a discount, or only offer the service at all, if both accounts are held with the same bank.
posted by phoenixy at 10:53 AM on November 9, 2009

Response by poster: Yes, I am in the US, and I use Sterling Savings Bank and US Bank. I asked both of them and they said it can't be done. I didn't ask about a "standing order" though--just whether the payment can be automated. The payment is being made to a credit union.
posted by HotToddy at 11:02 AM on November 9, 2009

Have you checked with your bank? My (US) credit union lets me do recurring transfers, to one of my other accounts or to an individual's account, through its online banking.
posted by rhapsodie at 11:02 AM on November 9, 2009

BOA unfortunately.
posted by bunny hugger at 11:09 AM on November 9, 2009

Does it have to be monthly? If not, you should be able to manage this through your employee payroll department if they allow direct deposit. You can have a certain amount deposited into one bank account and the balance deposited into your bank account for every paycheck. All you need is the deposit slip - which you already have.
posted by CorporateHippy at 11:28 AM on November 9, 2009

Response by poster: CorporateHippy, good idea, but I'm self-employed--no payroll dept.
posted by HotToddy at 11:30 AM on November 9, 2009

If you both have the same bank, it's easy to set up transfers to another customer.
posted by radioamy at 11:33 AM on November 9, 2009

I know Wells Fargo lets you do this to another Wells Fargo customer. May be worth both of you switching banks?
posted by cda at 12:01 PM on November 9, 2009

paypal
posted by digividal at 12:17 PM on November 9, 2009 [1 favorite]

Response by poster: digividal, unless there's something I'm missing, I think the PayPal service involves issuing a check. Do you know specifically which service of theirs might do what I'm looking for? I had looked into PayPal previously, but they don't seem to do this.

cda and others--I can't switch to their bank and I can't ask them to switch to mine.
posted by HotToddy at 12:36 PM on November 9, 2009

Best answer: My credit union allows this as part of their bill payment, but if your bank doesn't, you can do it through a 3rd party:

Get an online checking account with ING Direct, and link your checking account to your Sterling Savings account. Use ING's "automated transfer" feature to transfer money into your ING checking account automatically on a schedule, and then their bill pay system to transfer the money to your friend's bank account (you just need the rounting # and account number). This can all be set up to be fully automated, and is 100% free.

The caveat: When you deposit money with ING it can't be removed for 5 business days, and the bank transfer also take time, so you might have to have the automated processes start 2 weeks before you actually want the payment to take place.
posted by Vorteks at 12:43 PM on November 9, 2009 [2 favorites]

Wow, I previewed and proofread my post, and it's still riddled with spelling errors. :-(
posted by Vorteks at 12:45 PM on November 9, 2009

Here's information on ING's Person2Person payment option.
posted by Vorteks at 12:47 PM on November 9, 2009

If you have a Bank of America checking account you can use Bank of America's website to transfer money to external bank accounts, free of charge (if I recall correctly).
posted by the_ancient_mariner at 1:07 PM on November 9, 2009

Response by poster: Vorteks! Awesome! Thank you so much (and everyone else, too).
posted by HotToddy at 1:11 PM on November 9, 2009

Wow - I had the exact same problem. I even opened an account at the other person's bank (Wachovia) and then found out that they didn't allow even customer-to-customer transfers. (Since they had been acquired by Wells Fargo, who does allow it, I was surprised.) ING, here I come.
posted by metahawk at 5:29 PM on November 9, 2009

B of A online account has a billpayer section, I pay all my utilities, taxes (income & property), credit cards (Sears, Visa, etc.), and they have a place to make a transfer to persons or businesses also. Just have to have a routing # and account # of the person or place you want to transfer funds.
posted by LindaLou21356 at 12:35 AM on November 10, 2009