Direct deposit for teens: Everything you need to know

Direct deposit for teens: Everything you need to know

If your teen is eager to get a part-time job and start earning, they aren't alone. Our research shows that four in ten (40%) US teens have a part-time job, rising to over half (51%) of those aged 18. And nothing is more exciting than getting your first paycheck! That said, if your teen is working or keen to make money, they need to know the best way to get paid. With that in mind here's everything your teen needs to know about direct deposits.

Related: How to make money as a teen


What is a direct deposit?

Part of knowing how to prepare like a pro for your first job as a teen is for them to understand how much they will earn, how often they will be paid, and how they will be paid. This information will come from an employer before they start work, so they need to ensure that they have it in writing. 


Explain to them that their employer will also ask how they would like to be paid, and while getting a check or cash in their hand sounds exciting, a direct deposit is a better and safer option.


If your teen hasn’t heard of a direct deposit before, explain it’s a method of depositing money directly into a bank account conveniently and safely. 


It's often used for paychecks, tax refunds, and other payments. When anyone sets up direct deposit, they give their employer or other payers their bank account information. By doing this money is then deposited directly into their account on a regular schedule.


What's the benefit of teens getting paid by direct deposit?


Direct deposit is often preferred over receiving a physical check or cash because with a direct deposit, teens don't have to worry about:

  • Going to the bank to deposit their checks, and they don't have to worry about their checks getting lost in the mail.

  • Making sure their check has cleared as money is automatically deposited into their account with a direct deposit and they can access it immediately.

  • Losing the money. With direct deposit, the money is automatically deposited into a bank account.

  • Spending it all. Money in an account over money in your hand, makes it easier to track spending, which can help teens learn about budgeting. spending wisely and saving. 

Bad financial habits. Being able to manage the money they’re making via online banking or an app helps teens to learn to manage their money, and develop good financial habits like budgeting and saving.



Where can a teen set up a direct deposit from a job?

No matter where your teen chooses to set up direct deposit, they need to provide their bank account information, employer's tax identification number (TIN), and start date. 


Once a direct deposit is set up, paychecks will be automatically deposited into their bank account when they get paid.


Here are the places where a teen can set up direct deposit from a job:

  • Directly with their employer. Most employers offer direct deposit as an option for their employees. To set up direct deposit, your teen will need to provide their employer with their bank account information.

  • With their bank. Some banks offer direct deposit services for their customers. To set up direct deposit, your teen will need to contact their bank and ask about their direct deposit options.

  • With a third-party service. Several third-party services, such as prepaid debit cards, offer direct deposit services. They can be a convenient option for teens who do not have a bank account or who do not want to use their employer's direct deposit service.

How can GoHenry help?

GoHenry’s teen debit card and app can help teens in several ways. Benefits include having wages paid into their account from their first payday onwards and learning how to budget and track their spending.  GoHenry also enables them to automate savings so money goes directly into a savings pot as soon as they get paid. Bite-sized money lessons and videos are also available in the in-app Money Missions to teach them more about saving, earning and budgeting.




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Written by Anita Naik Published Aug 7, 2023 ● 5 min. read