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I have a post about how to make money from by taking the advantage of sing-up bonuses (click here). However, you will always see “Free checking with direct deposit” or “$100 bonus when you open a new account with direct deposit”. Most of banks require direct deposit if you want to get sign-up bonus. The reason is very simple: banks exactly know the influence of bank account with the rest of your financial life. They hope you can use their other services like mortgages, personal loans, auto loans, student loans and other financial products. They assume that you are too lazy to go to contact your payroll office to have your direct deposit redirected to another bank account. It’s true we don’t want to change our bank account frequently. However, we are not satisfied with merely one bank account. There are so many sing-up bonuses from so many banks. Then an “unofficial payroll office” is a must in order to jump in so many deals. ING and PayPal are most discussed and used direct deposit tools.

According to the definition from electronicpaymnet.org, a direct deposit is simply an electronic transfer of funds to your account. This is usually done by a method known as ACH transfer. Unless a real person is looking at the detail of the ACH transfer, there is no real way to automatically tell if the ACH is a payroll deposit or not. Most of the time a bank will count these non-payroll transfers as a direct deposit, which allows you to avoid service fees and/or collect promotional bonuses based on the use of direct deposit. (For more detailed information please refer to electronicpayment.org.)

After searching on the internet via Google, I summarized some most common banks that count ING or PayPal ACH transfers as direct deposits.

Bank of America (ING, PayPal)

Bank One (ING, PayPal)

Chase (ING)

Citibank (ING, Paypal)

Citizens Bank (ING)

Commerce Bank (ING, Paypal)

Compass Bank (ING)

E-Trade Bank (ING)

HSBC (ING)

PNC Bank (Paypal)

Principal Bank (ING)

SunTrust (ING, PayPal)

USAA (ING)

Wachovia (ING, no PayPal)

Washington Mutual (ING, Paypal)

Wells Fargo (no ING)

You can set direct deposit alert on Chase checking account. If the ACH transfer is counted as direct deposit, they automatically send you an email to confirm that. Of course, the prerequisite is you should set the alert by yourself. Please note that you should never call your bank to verify whether or not ING & PayPal are counted as Direct Deposit.