Before filing your 2020 taxes, you may want to open a checking account with early direct deposits

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• Some checking accounts process your direct deposits up to two days early, including IRS payments.
• The IRS deposits payments into the account you list on your most recent tax return.
• To receive child tax credits or future stimulus payments early, you may want to get a new account before filing 2020 taxes.
• See Insider’s list of checking accounts with early direct deposits »

Many Americans have already received their $1,400 stimulus checks. But some banks haven’t deposited the money into customers’ accounts yet – most notably Wells Fargo and Chase.

What are these big-name banks doing differently than others? They haven’t set up early direct deposits.

The IRS states the “official payment date” for stimulus checks is March 17, so Wells Fargo and Chase customers will receive payments on March 17 or later. But people with bank accounts that have early direct deposits may have already received their stimulus checks.

If you switch to a checking account with early direct deposits, you could receive future direct deposits up to two days early.

Why some bank accounts process direct deposits before others

Let’s say payday is Friday. On Monday, your employer submits information to its bank about how much you’ll receive. Your employer’s bank communicates with the Automated Clearing House (commonly referred to as ACH), which is the network that processes direct deposits. Basically, the ACH is the middleman that transfers money from your employer’s bank to your bank.

The ACH will probably pass the information along to your bank by Wednesday. Here’s where the process changes, depending on which institution you’re banking with.

Most accounts receive this information on Wednesday, then process the payment. The payment finishes processing and shows up in your account Friday, or payday.

But with an account that has early direct deposits, the bank puts money in your account before the payment finishes processing. The bank trusts that the information from the ACH is correct and that your payment will go through.

So you could receive your money up to two days early – or in this case, on Wednesday instead of Friday.

Not all checking accounts have early direct deposit capabilities, though. Only certain banks operate this way, and some banks only have early direct deposits with some of its checking accounts, not all.

Paychecks aren’t the only direct deposits you’ll receive early with these accounts. You can also get your unemployment check, tax refund, stimulus check, child tax credit, or any other direct deposit from the IRS up to two business days early.

You may want to open a new checking account before filing your 2020 taxes

If you’re just focused on getting your paychecks early, you can open a new account with early direct deposits and submit the new information to your employer.

But what if you want to receive IRS payments early, like the child tax credits available through the American Rescue Plan that President Biden signed on March 11? Or your next stimulus payment, should the government choose to administer one?

Then you’ll want to open a new checking account before you file your 2020 taxes. The IRS uses information from your most recent tax return to distribute payments like tax credits and stimulus checks.

Let’s say you most recently filed your 2019 taxes. When you filed, you opted to receive your return as a direct deposit into your Wells Fargo account. Wells Fargo does not process early direct deposits, so if you decide to receive regular child tax credits in 2021, you’d receive them in your bank account on the due date every time.

But you could open a new checking account with an institution that has early direct deposits. When you file your 2020 taxes, you’d select to receive direct deposits into that account. Then you could receive child tax credits early every time. As a result, you could pay bills, buy groceries, or fill up your gas tank two days sooner whenever you get your tax credit.

Checking accounts with early direct deposits

Your local bank or credit union may have early direct deposits set up. But here are some accounts that people can open from around the US that will get your paycheck, unemployment check, or IRS payment to you early. We’ve also included other features that could help you decide between accounts:

• Axos Bank Essential Checking: Axos has a large ATM network, and it reimburses an unlimited amount in any fees charged by out-of-network ATMs
• Cheese Account: This is a great option if you’re an immigrant, Asian American, or someone who wants to support Asian American communities
• Chime Spending Account: Chime doesn’t charge foreign transaction fees
• Current Premium Personal Checking Account: You won’t pay overdraft fees if you overdraw by $100 or less
• GoBank Checking Account: You might like GoBank if you’re just looking for a simple checking account
• GTE Financial Full Access Checking Account: You can open this account online, or bank in person if you live in the Tampa area
• One account: This is a hybrid checking/savings account, and you’ll earn high interest rates on your savings pockets
• OneUnited Bank BankBlack Checking Account: Bank with the largest Black-owned bank in the US, either online or in person in California, Florida, or Massachusetts
• Porte Account: This is a cash-back account, and you can select a charity for Porte to support
• Radius Rewards Checking Account: Radius pays cash back and reimburses out-of-network ATM fees
• Varo Checking Account: Varo doesn’t charge foreign transaction fees
• Wealthfront Cash Account: You can automatically move money from from this account into Wealthfront investments as soon as your paycheck hits the account

Early direct deposits help you get paychecks and IRS payments up to two days early, so you can pay bills or buy essentials sooner. If you want tax credits or future stimulus checks to hit your account early, be sure to submit information for your new checking account when you file your 2020 taxes.

Laura Grace Tarpley is the associate editor of banking and mortgages at Personal Finance Insider, covering mortgages, refinancing, bank accounts, and bank reviews. She is also a Certified Educator in Personal Finance (CEPF). Over her four years of covering personal finance, she has written extensively about ways to save, invest, and navigate loans.

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