Jan 11 2010

How to Fake a Direct Deposit and Avoid Bank Fees

The exact definition of a “direct deposit” is quite vague in the banking world. Most of us understand a direct deposit to be a method of receiving payment electronically into our bank accounts. The typical forms of direct deposit are wages and Social Security income.

Why Do I Need to Fake a Direct Deposit?
Many bank accounts often have a monthly fee that can be waived under certain conditions. Sometimes, they require that you have one direct deposit per month to avoid paying that fee.

Or, a bank may be offering a promotional bonus to new customers who open a bank account – and the bonus is rewarded once the terms are met, such having a direct deposit.

For example: A couple months ago, I opened a checking account when Chase was offering a $100 bonus for new Chase Checking customers. To get the $100 cash bonus, I needed to set up direct deposit or make five debit card transactions. I had to meet the same conditions if I wanted to waive the $6 monthly fee.

Therefore, faking a direct deposit would beneficial to avoid paying account fees and to earn bonus cash.

How Can I Tell if a Transfer is a Direct Deposit?
The easiest way to determine whether or not a credit in your bank account is a direct deposit is to set up account alerts. Account alerts is a common online banking feature that would serve as a detector.

Configure your alert settings to email or text you whenever you receive a direct deposit greater than $0.01. Now, you can go on ahead and test which transactions are considered direct deposits.

Ways to Fake a Direct Deposit

  • Online savings accounts. Online banks such as ING Direct and HSBC Direct both offer popular online high-yield savings accounts. Perform a direct deposit test by making a small transfer from these savings accounts into your checking account. If this works for you, set up monthly automatic transfers to your checking account.
  • Paypal. Electronic payment services such as Paypal have accounts where they hold money for you. Try to withdraw funds from these accounts and see if your checking account recognizes the transfer as a direct deposit.
  • Amazon. If you sell your stuff on Amazon, you’ll know that you had to provide your bank routing number and account number to receive payment. Every two weeks, Amazon disburses payments to you. This is very much like received a biweekly paycheck and it is considered to be direct deposit.
  • Affiliate and advertising networks. If you have your own website, affiliate and advertising networks will often pay you on a monthly basis (if you meet minimum payout requirements). Choose to receive your commission and earnings through direct deposit. Although it isn’t really faking a direct deposit, it is an alternative method of getting it.

Once you have found a method of getting a “direct deposit”, you would have to remember to initiate the transaction (or have an automated system set up) and confirm it with the account alerts.

Note: A direct deposit transaction is never initiated through the receiving bank account. That means that you shouldn’t request a transfer while being logged into your checking account.

So, to those who are paying those nasty monthly account fees – stop. And to those who will use fake direct deposits to take advantage of account bonuses – enjoy!

(Photo credit: ericskiff)

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8 Comments on this post


  1. Single Guy Money said:

    Great post. I always wonder what type of deposit will be considered a direct deposit or just an ACH credit. As you mentioned, most accounts require a direct deposit in order to avoid a fee.

    January 11th, 2010 at 8:12 pm
  2. Maria said:

    Interesting, thanks for posting. I had no idea. Now, sorry if I’m giving away my naivete here, but why do banks apparently value direct deposits over in-person ones?

    January 12th, 2010 at 12:47 am
  3. Simon Zhen said:

    Direct deposits is electronic and faster. It requires less work and the funds arrive quicker, which means the bank can begin using your money to make money earlier.

    January 12th, 2010 at 1:10 am
  4. Jerry said:

    This is absolutely fantastic information. We are currently getting charged through B of A and were considering leaving because of it. I’m going to give this a try and see if it leads to no fees. Can I call them and ask? We’re trying to save in every area so this little tidbit is just more insurance for our budget. Thanks a lot.

    January 15th, 2010 at 10:21 am
  5. Simon Zhen said:

    @Jerry: It is best not to ask and alert them to the little loopholes that consumers use. Find out what works and stick with it. What a bank considered direct deposit is usually determined by the type of transfer and recognized by their computers.

    Don’t banks have any more control over you than they already do!

    January 16th, 2010 at 5:08 pm
  6. Liz said:

    Honestly, 3 out of 4 of these options would not work. I work for a bank and there is a different transaction code for ACH credits then actual employer payroll direct deposits. When most banks waive your fees with direct deposit they are talking about a payroll direct deposit which is (in the banks eyes) completely different from an ACH credit. Yes it is very easy for them to tell the difference. The only option that has a small chance of working would be the affilliate commission for a website depending on how they make those deposits into your accout. If you don’t believe me check your bank disclosures.

    January 30th, 2010 at 11:55 am
  7. Simon Zhen said:

    @Liz: I’ve personally triggered direct deposit alerts with all four methods above so I’m writing from experience. I understand that banks could tell the difference with relative ease and direct deposit was meant for any stable, consistent payment.

    But, since you are working in the banking industry, could it be possible that a bank would allow certain ACH credits to count as direct deposits just so that a bank could receive funds faster – and therefore, can begin lending out funds earlier?

    January 30th, 2010 at 12:08 pm
  8. Dave said:

    My employer allows me to select multiple accounts to have my paychecks sent to. I designate that $1.00 goes to my checking account at bank A, $1.00 goes to my wife’s checking account at bank B, and the remaining amount goes to my checking account at bank B. With one paycheck, I am able to meet the direct deposit requirements in three different checking accounts.

    September 10th, 2010 at 11:09 am


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