Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
Guess what? Starting next year, Social Security recipients as well as those receiving veterans’ benefits, railroad pensions, and federal disability payments will no longer receive physical checks sent through the mail. Instead, the government will only issue electronic payments.
In general, this means direct deposit to a bank account, though debit cards will be available for the unbanked. For the time being, tax refunds will be exempt from this requirement, though the IRS has been pushing direct deposit for quite some time.
As it turns out, 90% of these payments are already made electronically, but still… Making the remaining 10% of these payments (7.3M per month) represents should save the feds a significant chunk of change.
The changeover is expected to be complete by March 2013, at which point the USPS will have even less business (and greater losses) than it does right now.
All in all, I see this move as a good thing. It’s significantly cheaper — the estimated cost savings is $120M/year — and avoids the possibility of checks being lost or stolen. The primary downside is for those without bank accounts, as they could wind up facing ATM fees to access the money on their debit cards.
What do you think? Is this a good move?
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (693)
- Dish Network Customer Service SUCKS (536)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (329)
- How Much Should You Pay a Babysitter? (288)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (237)
- Will Mac OS X Lion Kill Quicken 2007? (191)