Setting up direct deposit isn't just a safer way to ensure you get your tax refund — it's faster, too.
According to the IRS, electronic refunds are typically deposited within 21 days of filing an e-return. That's compared to six to eight weeks for a printed return with a mailed check.
More than 80% of taxpayers already use direct deposit, and an executive order issued in March requires government agencies to stop using paper checks by September 30, 2025, and switch over completely to electronic funds transfers (EFTs), like direct deposit, debit and credit cards, digital wallets and real-time transfers via platforms like Zelle.
"Paper-based payments, such as checks and money orders, impose unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies," the order read, in part.
Fortunately, the process to set up direct deposit is not complicated.
What is direct deposit?
Historically, payments between parties were made with physical paper checks. A direct deposit or electronic funds transfer (EFT) allows a payer to submit funds to a payee electronically directly into your bank account.
The system requires payees to provide routing and banking information to receive direct deposit payments. In some cases, you can provide a voided check, which has that information printed on the bottom.
Direct deposit requires the financial institution to use a network called an automated clearing house (ACH) but that means there's no need to wait for the funds to "clear." The account is credited automatically.
Direct deposit is often used by employers to issue paychecks and by the government to provide tax refunds, Social Security and VA benefits. You may also set up bill payments through direct deposit.
How to set up direct deposit
You typically need a checking or savings account to set up direct deposit with any government agency or commercial entity. Once you've opened an account, you'll need to provide the company or organization with its routing number and account number.
If you have paper checks, your routing number is the nine-digit number on the bottom left. It's followed by your account number in the middle and the specific check number on the right. (To get your tax refund, you won't need to provide a check number.)
Some banks provide routing numbers on their websites or over the phone, but require extra steps to to keep the information secure.
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How to set up direct deposit for your tax refund
Enter the routing and account information when prompted to by your tax software or tax professional. If you are filing a paper return, you'll need to complete the refund portion (lines 35a-d) on Form 1040.
If you don't have a bank account, Venmo, Cash App and PayPal all accept tax refund direct deposits, as well.
Once you've submitted your return, you can track the status of your refund with the IRS's Where's My Refund tool.
If you entered incorrect banking information and the deposit has not cleared yet, you can call the IRS at 800-829-1040 to stop it. If the refund already posted, the financial institution that received can return it to the IRS, which will issue a paper check to the address it has for you on file.
If you don't hear from anyone, you can file Form 3911 to trace where the deposit went. The IRS can then contact the financial institution on your behalf, but it can't compel it to return any funds. The agency cautions that the case could become "a civil matter" between you, the bank and the owner of the account into which the funds were deposited.
Direct deposit FAQs
Where can I find my routing and account numbers?
If you have a paper check, you can find the routing and account numbers on the bottom. The routing number is a nine-digit number on the left, with the account number in the middle and the check number on the right. The information should also appear on bank statements and may be available on your financial institution's website.
Does it cost money to set up direct deposit?
There's usually no charge to receive your income or tax refund via direct deposit. Employers may have to pay a fee to set up direct deposits for their employees.
What time does a direct deposit hit?
Direct deposits will typically appear in your account by 9 a.m. on your payday. Many banks release funds even earlier, sometimes as early as midnight.
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