Recurring direct deposit question

[grillandwinemaster]

Hello MyFico friends, quick question.  

I'm self employed and as such it's complicated to set up a direct deposit in order to qualify for a free checking account.  

If You set up a weekly recurring "bill pay" from one bank to another bank, does this count as a recurring "direct deposit?" 

Has anybody tried this before? Thanks in advance for your input. 

[Gmood1]

Depends on the financial institution. I have some CU's that do consider a monthly scheduled ACH deposit from another CU or bank as a direct deposit.

[grillandwinemaster]

Good to know. I'm going to try to set up a recurring transfer from my SCE FCU to my Alaska FCU and see if I can avoid the $5 monthly charge. 

[Gmood1]

I'd just call and ask. They'll tell you. I'd say your chances are pretty good being that it is a credit union.

[UncleB]

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@grillandwinemaster wrote:

Hello MyFico friends, quick question.  

I'm self employed and as such it's complicated to set up a direct deposit in order to qualify for a free checking account.  

If You set up a weekly recurring "bill pay" from one bank to another bank, does this count as a recurring "direct deposit?" 

Has anybody tried this before? Thanks in advance for your input. 

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If you set it up through bill pay, it will probably be sent as a paper check and treated like any other manual DDA deposit at the destination, since most bill pay solutions aren't set up to treat deposit accounts as a creditor.

What I do is use the option to 'transfer to an external account'.  With some banks there is a charge, but at USAA it's free, and each month I transfer funds to both Wells Fargo and my Amex Serve card.  Both of these see the incoming transfer as a 'Direct Deposit' and I'm able to get the monthly fee waived at both as well. 

[grillandwinemaster]

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@UncleB wrote:

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@grillandwinemaster wrote:

Hello MyFico friends, quick question.  

I'm self employed and as such it's complicated to set up a direct deposit in order to qualify for a free checking account.  

If You set up a weekly recurring "bill pay" from one bank to another bank, does this count as a recurring "direct deposit?" 

Has anybody tried this before? Thanks in advance for your input. 

---

If you set it up through bill pay, it will probably be sent as a paper check and treated like any other manual DDA deposit at the destination, since most bill pay solutions aren't set up to treat deposit accounts as a creditor.

What I do is use the option to 'transfer to an external account'.  With some banks there is a charge, but at USAA it's free, and each month I transfer funds to both Wells Fargo and my Amex Serve card.  Both of these see the incoming transfer as a 'Direct Deposit' and I'm able to get the monthly fee waived at both as well. 

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Ok, good point, and the timing is perfect. My main credit union, SCE is just now updating there web site to allow external transfers. I don't believe they previously had that capability. 

[Anonymous]

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@grillandwinemaster wrote:

Hello MyFico friends, quick question.  

I'm self employed and as such it's complicated to set up a direct deposit in order to qualify for a free checking account.  

If You set up a weekly recurring "bill pay" from one bank to another bank, does this count as a recurring "direct deposit?" 

Has anybody tried this before? Thanks in advance for your input. 

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Great question, GAWM.  It's not rare at all for a particular checking account at a particular bank or CU to waive their monthly fee if a recurring direct deposit is made.  Promotion bonuses for opening a new account are also often tied to making a "direct deposit." 

As others have indicated, the definition of what constitutes a DD for these purposes varies from institution to institution.  With some banks the method needs to be a paycheck or a social security check -- nothing else will work.  With many others any ACH transfer will work.

The web site Doctor of Credit has a strong focus on bank bonuses and they have a large knowledge base that catalogs hundreds of banks and CUs and lists what methods work as a DD at each bank/CU.  Here is a link:

http://www.doctorofcredit.com/knowledge-base/list-methods-banks-count-direct-deposits/

DoC has also pointed out that there is a hybrid situation that is not uncommon at all for a bank.  This is where they officially have a restrictive policy (only paycheck or SS check alllowed) -- and if you call them that's what they will say.  Furthermore, if you call them you will be drawing to their attention that you want to use a backdoor method (simple ACH) and they might deny your bonus or start imposing fees.  But... if you just test it without calling them to ask, you might get a pleasant result.  This is part of the basis for their article to their readers entitled Don't Call The Bank:

http://www.doctorofcredit.com/dont-call-the-bank/

Should you become interested in the whole world of making money from chasing bank promotions, they have a nice article here:

http://www.doctorofcredit.com/a-beginners-guide-to-bank-account-bonuses/