re: Regions Bank and Deposit Holds

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Because paper checks are a huge pain in the arse, some payroll providers will actually cover direct deposit fees for you. Also, paper checks can sometimes be more expensive once you factor in costs like time spent running checks, purchase of check stock, and MICR ink (which is a lot pricier than normal ink.) Might be worth running an analysis on regardless.

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It is commonly estimated that each "hardcopy" salary check a small company writes costs about $1 (considering employee bookkeeping time). This can increase significantly in instances of check fraud or lost checks. Lost employee time for depositing checks is estimated at about $2 per employee. The total cost per written "hardcopy" check is thus approximately $3. Clearly, this is an estimate, and will vary widely from company to company.

In the example above, the company with ten employees will pay about $16.50 for direct depositing all 10 employee salary checks. If all ten employees were paid using traditional checks, costs would be about $30. Thus, a savings of about $13.50 could be achieved each pay period.

Realistically speaking, once accounts are set up with a bank, direct deposit costs most small companies about the same or less than using traditional checks. Perhaps the main benefit of direct deposit for employers is the convenience for employees. The reduced risk of fraud, stolen checks or lost checks, however, can also be significant long-term benefits of direct deposit.

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