Whether you have made it through the SSDI process or currently are in the process, you will be faced with making the decision regarding how to receive your monthly SSDI benefits.
You have three options: direct deposit, paper check or debit card, which is being rolled out nationwide this summer by the U.S. Treasury. SSDI recipients are encouraged to review the pros and cons of all three options available to them as each has its own financial and other ramifications.
Direct Deposit
Most people receive their SSDI benefits by direct deposit into a bank account. This is a popular option for many reasons:
- It’s convenient and reliable. You can rely on that money to be deposited into your account on your payment date every month.
- Low or no cost. Many banks offer no minimum balance checking accounts with the option to electronically pay bills or use their ATMs at no additional charge.
- Manage your money better. You can track your expenses and use the many reporting features in order to manage your finances better.
- Your money is secure. Your bank deposits up to $100,000 are protected and insured by the FDIC.
Some of the complaints about using the direct-deposit option are from people who may have credit issues and are concerned that their bank may freeze their account due to a creditor’s judgment against them. Generally, however, federal law provides that Social Security benefit payments are protected from attachment. This means creditors may not remove these funds from a recipient’s bank account. Though bank accounts may still be unavailable while you and/or your bank prove that your deposits consist of Social Security benefits, and therefore cannot be attached by creditors. Joint accounts with funds from other sources or where the joint account holder is the one with credit woes may complicate the immunity from creditor attachment issue.
While most people already have their benefits directly deposited into their bank accounts, there are other options.
Paper Check
Until recently, the only other option available to receive SSDI benefits was to receive a paper check. One of the reasons that some SSDI recipients insist on paper checks is because they are afraid that creditors will attach their accounts. Remember, however, that generally, federal law can prevent that from happening.
Drawbacks of receiving a paper check include:
- The fees. You may have to pay a check-cashing fee each month when you receive your check. If you need cashier checks to pay bills, you also will be charged for each of these.
- Unreliability. Your check may arrive on the day it’s supposed to. But it may not. You never know if your check will be lost in the mail, delayed because of an error by Social Security, or worse yet, stolen.
- It’s not convenient. Each month you have to make a trip to cash your SSDI check. If you get sick or hospitalized, you may be unable to cash your check.
- Your money is not protected. If it’s lost or stolen, it’s gone.
Debit Card
If neither of these options is viable for you, then consider the newest option – have your SSDI benefits loaded directly onto an electronic debit card. The debit card program, called Direct Express® Debit MasterCard®, is run by the U.S. Treasury Department through Comerica Bank. The intent is to encourage Social Security recipients who do not have a bank account to elect to have their benefits loaded electronically onto a debit card.
There are many benefits to the electronic debit card:
- Save money. It could save some recipients hefty check-cashing fees.
- It’s convenient and safe. You’re basically walking around with your SSDI benefits on you at all times, and you don’t have to carry large amounts of cash.
- Funds are protected from creditors. Social Security benefits loaded onto the debit card have the same federal protection from attachment by creditors as funds deposited in a bank account.
- It’s reliable. Your check will never be lost in the mail again. No more waiting for your check to come in – your monthly benefits will be automatically loaded onto your card on time, every time each month.
- Easy-to-use. The debit card is accepted at any bank, retail outlet or ATM (automatic teller machine) that accepts MasterCard®.
While the benefits to using the debit card are great, there are other things to consider before committing to receiving your SSDI benefits via debit card. It’s free to use the card, but like most debit cards, fees may apply for activities such as accessing an out-of-network ATM and using the electronic bill payment feature. It’s important to determine how accessible an ATM is in the Comerica network –
visit here to locate one now or call 800-741-1115.
Other aspects to consider: How often will you use the electronic bill payment feature? Do your service providers charge you to send electronic payments? The debit card may be a good option to consider, but assessing your needs and the associated fees are important because the fees may add up quickly.
To get a better idea of the typical fees involved, consider the following table:
|
Domestic Use Charges |
Fee |
|
ATM cash withdrawal from a designated ATM |
One free per month; 90 cent ($.90) fee for each additional ATM withdrawal |
|
ATM cash withdrawal from ATMs outside of the Comerica Bank network |
Surcharges by nonnetwork ATM owners may apply - up to $3 per withdrawal. |
|
Online bill payment |
50 cents ($0.50) per online bill payment |
|
Funds transfer to a personal U.S. bank account |
$1.50 per transfer |
|
Monthly paper statement mailed to you |
75-cent ($0.75) monthly fee |
|
|
|
|
International Use Charges |
Fees |
ATM cash withdrawal from a designated ATM |
$3 per withdrawal AND 3% of the amount withdrawn |
ATM cash withdrawal from ATMs outside of the Comerica Bank network |
$3 per withdrawal AND 3% of the amount withdrawn; surcharges by nonnetwork ATM owners may apply |
|
Debit transactions |
3% of the purchase price |
Allsup encourages you to weigh the advantages and disadvantages of each of these options carefully, especially the financial implications, and choose the option best for you.