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. SSDI recipients are encouraged to review the pros and cons of all three options available to them.
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. The money is 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 $250,000 are protected and insured by the FDIC.
Some people are reluctant to use direct deposit because they fear that creditors can seize their money. This cannot happen.
Social Security benefits are protected from attachment by federal law. This means creditors may not remove these funds from a recipient’s bank account.
However, there is the chance that your bank accounts could be unavailable while you and/or your bank prove that your deposits consist of Social Security benefits. Joint accounts with funds from other sources or where the joint account holder is the one with credit problems may complicate protecting deposits from creditors.
If credit issues are a concern, one consideration is to have an account only for your Social Security benefit payments. This will help ensure these funds are easily identifiable and protected.
Debit Card
If you prefer not to have your funds directly deposited into a bank account, the other safe method of receiving your benefits is to have them 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. In its first year, more than one million Americans signed up for this payment option.
There are many benefits to using the electronic debit card:
- Save money. You may be able to avoid hefty check-cashing fees.
- It’s convenient and safe. You can have access to your SSDI benefits at all times without carrying 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 or delayed in the mail again. Your monthly benefits will be automatically loaded onto your card at teh same time each month.
- Easy-to-use. The debit card is accepted at any bank, retail outlet or ATM (automatic teller machine) that accepts MasterCard®.
It's also free to use the card.
However, like most debit cards, fees may apply for activities such as accessing an out-of-network ATM and using the electronic bill payment feature. To help avoid or minimize ATM fees, you can find out how accessible an ATM is in the Comerica network –
visit here to locate one now or call (800) 741-1115.
The debit card is a good option to consider, but you should consider how you want to use it and the associated fees.
Typical Debit Card Fees
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Domestic Use Charges
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Fee
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ATM cash withdrawal from a designated ATM
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One free per month; 90 cent ($.90) fee for each additional ATM withdrawal
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ATM cash withdrawal from ATMs outside of the Comerica Bank network
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Surcharges by nonnetwork ATM owners may apply - up to $3 per withdrawal.
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Online bill payment
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50 cents ($0.50) per online bill payment
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Funds transfer to a personal U.S. bank account
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$1.50 per transfer
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Monthly paper statement mailed to you
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75-cent ($0.75) monthly fee
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International Use Charges
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Fees
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ATM cash withdrawal from a designated ATM
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$3 per withdrawal AND 3% of the amount withdrawn
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ATM cash withdrawal from ATMs outside of the Comerica Bank network
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$3 per withdrawal AND 3% of the amount withdrawn; surcharges by nonnetwork ATM owners may apply
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Debit transactions
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3% of the purchase price
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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. While federal law prohibits this from happening, it can occur, especially when SSDI funds are mixed with other account funds.
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 or may not arrive when expected. You never know if your check will be lost in the mail, delayed because of an error by Social Security, or even stolen. If a check is lost, processing times for obtaining a replacement check are slow and can take weeks.
- 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.
Review all the features that are important to you, such as fees, safety and convenience. That will help you make the decision that's right for you.