The problem is clear. Workers are not saving enough for their future nor to cover emergencies that may crop up. In fact, the average personal saving rate – the amount of disposable income put towards saving – hovers around 6 percent, which is far too low. Further, 46 percent of U.S. households do not have $400 readily available to cover an emergency expense.
Yet, the solution is simple. In recognition of Direct Deposit and Direct Payment via ACH Month, which is celebrated annually in May, NACHA—The Electronic Payments Association® continues to promote the value of Direct Deposit and Split Deposit, and how these tools can help increase personal savings and build wealth.
“People are not saving. And, worse, they may falsely conclude that they do not earn enough to save regularly,” said Scott M. Lang, AAP, Senior Vice President, Association Services at NACHA. “But there is a way to save automatically that is also simple, safe and flexible.
“Splitting their Direct Deposit offers workers an effective way to regularly put aside a fixed amount or percentage of their pay automatically and directly into savings and investment accounts for emergencies, planned expenses or retirement,” Lang said. “The importance of automatic savings for workers’ long-term financial future cannot be overstated.”
According to a recent study conducted by Javelin Strategy and Research, 82 percent of U.S. workers ─ crossing age, income and other demographic categories ─ receive their regular pay using Direct Deposit via ACH. Yet only 24 percent split their deposits, typically placing their pay in a checking account and also designating a portion of funds to go to a savings account, 401(k), a business account, money market or to a prepaid card.
Of Split Deposit users, 85 percent say it is helping them to save, and 83 percent say the most common use for Split Deposits is for an emergency fund, according to the survey.
For more information about Direct Deposit, Split Deposit, and saving automatically, visit ElectronicPayments.org. A toolkit of shareable resources to help celebrate Direct Deposit and Direct Payment via ACH Month is also available.
Additionally, in February, NACHA and partner organizations America Saves and ePayResources launched the “Split to Save” initiative to engage businesses, consumer organizations, financial institutions, government agencies and universities, and help them support the financial health of workers. A “Split to Save” toolkit, which provides educational resources for building awareness about Direct Deposit and Split Deposit, is available for download.
 Bureau of Economic Analysis, U.S. Department of Commerce, www.bea.gov/newsreleases/national/pi/pinewsrelease.htm.
 Federal Reserve, “Report on the Economic Well-Being of U.S. Households in 2015."