How to set up direct deposits

How to set up direct deposits

Direct deposit allows your clients to have regular electronic deposits made to one or more Schwab accounts directly from a payer. With direct deposit, your client has fast, convenient access to funds because there is no hold period. Examples of direct deposits are paychecks, Social Security payments, other government checks, and interest payments.

Most direct deposits are set up at the institution making the deposit using the appropriate ACH instructions. Alternatively, you can use paper forms and other resources to set up direct deposits into your clients' Schwab Bank® accounts or 529 College Savings Plans. You can also use paper forms to automatically deposit dividends and interest payments from Schwab accounts into Schwab Bank accounts (accounts eligible for direct deposits are the same as those for ACH (MoneyLink)). However, some accounts are ineligible for direct deposit.

  • An eligible Schwab account (Schwab One®, Schwab Bank, and retirement accounts)
  • ACH instructions for the Schwab account
  • For dividend and interest payment direct deposits, a valid document from the financial institution—such as a check, deposit slip, statement, or letter on the bank letterhead signed by an officer—that contains the client’s account title, account number, account type, and ABA number Tooltip  
  • Adobe® Reader® or Adobe Acrobat® 7.0 or higher (download the latest version on the Adobe website)
  1. Open the Direct Deposit Sign-Up form (contact your service team to obtain the form).
  2. Enter the name and checking account number of the account holder(s) on the form. If establishing a direct deposit for a savings account, cross out Checking as the account type and write Savings instead.
  3. Send the form to the employer or payer of the account holder(s).
  1. Select the applicable form below to open the Forms & Applications page on Schwab Advisor Center®. Click Select, and then select Open PDF.
    • 529 Learning Quest Payroll Direct Deposit
    • 529 Schwab Plan Payroll Direct Deposit
  2. Complete all necessary fields.
  3. Print the form and obtain a signature from the account holder or responsible individual Tooltip . Mail the signed form to the applicable address located on the first page of the form.

This process may be used to set up a direct deposit of dividends, interest payments, and money market account income from eligible Schwab accounts (individual, joint, trust, sole owner or proprietor, IRA, and education savings) to an external account at another financial institution or to a Schwab Bank account.

  1. Select the applicable form below to open the Forms & Applications page on Schwab Advisor Center. Click Select, and then select Open PDF.
    • For eligible brokerage accounts and ESAs, open the MoneyLink (ACH) form.
    • For an IRA, open the IRA Distribution Form.
  2. Fill in the Schwab account information, the external account or the Schwab Bank account information, and the payment instructions. Make sure to check the appropriate box to indicate that these are new instructions.
  3. Print the form, attach a voided check or other valid document from the external account or the Schwab Bank account, and obtain the appropriate account holders' signatures and initials Tooltip  as well as signatures from all external account holders or Schwab Bank account holders.
  4. Send the signed form to your Schwab service team via a Schwab Advisor Center service request.

Once you have submitted your request to Schwab or another financial institution:

  • The information submitted will be processed by your service team.
  • Deposits generally begin earning interest either on the same business day as the deposit or the next business day after the deposit, depending on the cash feature selected on the account. Interest is earned independent of disbursement hold times.
  • After direct deposit information has been submitted for a 529 College Savings Plan, clients will receive a Payroll Direct Deposit Confirmation Form, which they must sign and submit to their employer’s payroll department.
  • A direct deposit into a Schwab One or Schwab Bank account usually takes at least two pay periods to begin. If Schwab returns a direct deposit to the payer because of restricted or closed account status, your client should contact you with questions about the account.
  • Review account transaction history to confirm accuracy and completeness of the direct deposit.
  • If a client links a Schwab One brokerage account with an established direct deposit to their Schwab Bank Investor Checking account, the direct deposit will need to be transferred to their Schwab Bank Investor Checking account. The existing direct deposit will continue for 90 days after the checking account has been opened; subsequent direct deposits to the brokerage account will be returned.
  • Contact the financial institution where the funds originated to cancel or deactivate a direct deposit into a Schwab account.
  • If you have questions about submitting direct deposits, contact your service team.

Go to the forms library on Schwab Advisor Center and select the forms below.

Form: 529 Learning Quest Payroll Direct Deposit 
Form: 529 Schwab Plan Payroll Direct Deposit
Form: IRA Distribution Form
Form: MoneyLink (ACH)

 

Can my clients set up direct deposits of Social Security/Supplemental Security income or other federal government income into their Schwab accounts?
Yes. Your client can submit direct deposit instructions at ssa.gov, or they can call the Social Security Administration’s ACH Transfer Department by calling 800-772-1213 and providing the direct deposit set-up information. See ACH instructions for the routing information.

Can my clients directly deposit their federal tax refunds into an IRA or ESA?
Yes. Clients may directly deposit all or a portion of their federal tax refunds into traditional IRAs, Roth IRAs, SEP-IRAs*, and ESAs only as long as they meet the following requirements:

  • Clients can make deposits for regular or spousal contributions only.
  • Deposits will be applied to the calendar year, not the tax year. Thus, deposits received between January 1 and April 18 will always be applied to that calendar year.
  • Clients must meet normal contribution eligibility requirements.
  • Normal contribution limits apply.
  • Married joint filers may fund each other's IRAs

*Direct deposit can only be completed by the employer. Employee contributions must be made via check, wire, or internal transfer (journal).

How long does Schwab hold funds directly deposited into a client’s account?
Funds directly deposited into your clients' accounts are immediately available for disbursement.

Whom should I talk to if my client wants to cancel a direct deposit?
For direct deposits into most Schwab accounts, contact the institution that originates the deposit because Schwab cannot deactivate or cancel your client’s direct deposit.

For 529 College Savings Plans, resubmit the 529 Schwab Plan Payroll Direct Deposit form or the 529 Learning Quest Payroll Direct Deposit form with the Stop Payroll Direct Deposit option checked.

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