What does it mean to set up an ""automatic deposit"" and why is this a good savings strategy?

Business

1 answer:

Anna71 [15]3 years ago

5 0

Answer:

It is an Eletronic Payment Method

Explanation:

An automatic deposit is a payment processing option where funds are deposited directly into the recipients' bank account. It is an electronic service applied in paychecks, tax refunds, and pensions. Individuals can set up such a service with their banks or employers.

As a saving strategy, an employee instructs the employer to make automatic payments to their savings account. The employee will decide the amount they want to save. The amount is deducted from their pay and send to their savings account. Business people can also instruct their bank to deduct a certain amount from the business account and send it to their savings account.

This strategy is suitable for saving because it's efficient. The amount meant for savings will not be available for other purposes. The automatic deposit system ensures the amount intended for saving is saved.

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