More employers are making DDA deposits into payroll cards instead of bank accounts because of the many benefits they provide.

In 2021, 1.7 billion people across the globe did not have access to a bank account, according to the World Bank, including 5.9 million in the USA.

Companies employing these workers have responded to the situation by supplying demand deposit account (DDA) payroll cards as an alternative way of paying salaries.

If you’re a business owner with workers in this situation, then you may be interested in a DDA payroll card as a way of paying underbanked staff, or even just to provide them with a cheaper alternative payment method.

However, DDA deposit payroll cards aren’t as well known as other payment methods and you may not be sure what a DDA deposit is, how it can help your business and your employees, and whether it’s worth the hassle of integrating into your payment system,

Many businesses are realizing that DDA deposit payroll cards offer many unique benefits, even in cases where employees have bank accounts.

DDA deposits can be completed quickly without the complications that often come with bank transfers, including unsuccessful transactions and reversals.

They also give your workers greater flexibility over their earnings, allowing them to request wages on demand rather than wait for a set date every month – a sure-fire way to boost morale.

DDA deposit cards are part of a wider trend. The usage of payroll cards in the US jumped from 2% of workers in 2015 to 28.5% in 2019, according to Bloomberg Tax and Accounting and DDA cards are an important variant of that.  

But what is a DDA deposit and why is its combination with payroll cards proving so transformative? In this article, we will answer those questions and provide other useful information:

  1. What is a DDA deposit account?
  2. Using payroll cards as DDAs
  3. What is a DDA deposit?
  4. Benefits of payroll DDA deposits

[Do you want to improve worker morale through quick and efficient payments? Sign up today with Berkeley Payment Solutions to start creating and funding employee payroll cards.]

1. What is a DDA deposit account?

A demand deposit account is a type of bank account that allows owners of the account to access their funds on demand (at any time) without issuing an advance notice to the bank.

Demand deposit accounts do not have a lock-up period – the time in which account holders can’t withdraw or transfer money – and they do not require owners to wait for several business days before they can access their funds.

Types of DDAs

Checking accounts and savings accounts are the two common types of demand deposit accounts. We can also add money market accounts (MMAs) to the list.

A checking account is often used as a transactional account from which users can easily pay bills and conduct other daily transactions.

Due to this transactional nature, checking accounts do not usually pay interest and banks (or credit unions) do not have minimum balance requirements for these accounts. These accounts typically don’t come with an overdraft facility.

Savings accounts are more likely to be interest-bearing (and their interest rates will be higher than checking accounts) and they impose a minimum account balance requirement.

In some cases, withdrawals can be limited per month (say 3-4 withdrawals per month) and a penalty is often imposed for any withdrawal above that threshold. Some financial institutions will also limit withdrawal methods to in-person cash withdrawals or transfers.  

The interest rates on money market accounts (MMAs) will be higher than savings accounts and they tend to impose a minimum account balance requirement (typically higher than savings accounts). They also often cap the number of withdrawals per month.

Source: WallStreet Mojo

Demand deposit accounts vs term deposits and investment accounts

DDAs are different from term deposit accounts (also called time deposit accounts) and investment accounts.

As the name implies, money in a term deposit account is held for a pre-agreed period. Unlike demand deposit accounts, any withdrawal from the account before the due date will attract a significant penalty. However, it has a higher annual percentage yield (APY) when compared to DDAs.  A certificate of deposit (CD), which requires that you keep your money with a bank for an agreed period without withdrawing, is an example of a term deposit.

what is a dda deposit

Source: Investopedia

Investment accounts are held with stock brokerages or other financial institutions. While assets in these accounts can be liquidated, it will take several business days before the account holder can access the cash.

[Negotiable order of withdrawal (NOW) accounts are a halfway house between DDAs and term deposits. They are guaranteed to pay interest and owners can withdraw any time they want. However, they may be required to give a 7-day notice before they can process a transaction. NOW accounts are no longer popular.]

2. Using payroll cards as DDAs

In a bid to make it easy to pay workers, especially those who do not have bank accounts, many organizations have shifted to payroll cards.

A payroll card is a prepaid card that you can issue to your employees and into which you can pay their wages/salaries and other remuneration. Payroll cards are reloadable, allowing you to pay workers as often as you desire.

Once the funds have been loaded into the payroll card, employees can use these cards just like any other debit card with ATM withdrawals, online payments, and offline payments all available to use.

A global surge in the use of these cards reflects their flexibility and convenience. The global prepaid card market (of which payroll card is a type) continues to rise. It is now worth $3.5 trillion and it will grow by 92% to become a $6.7 trillion industry in 2028, according to forecasts by Juniper Research.  

In the US, payroll cards constituted 12% of the prepaid card market in 2019, according to Javelin Research. We can expect that a rise in the use of payroll cards will go hand in hand with prepaid card growth.

Let’s revisit what we said about DDAs to see how payroll cards can be a useful type of DDA.

First, we saw that DDAs allow owners to access their money any time they want without the need for prior notice. Payroll cards satisfy this requirement. Your employees can carry out any debit transaction on these cards at any time without prior notice.

Second, DDAs do not require a lock-up period within which owners cannot access their funds. What’s more, DDA payroll cards allow your employees to spend the money on the card as soon as the money has been loaded into the card.

If payroll cards are a form of DDA, why are they important? Why not stick to other types of DDAs? Some unique benefits come with payroll cards:

  • No need to open a bank account: Some people still live in places where opening bank accounts is not easy (too many requirements) or where there are no banks for them to even open an account.

In a global village where companies employ people from different parts of the world, a payroll card can serve as an alternative. Your unbanked employees can still access their money and spend it without needing a bank account.

Some employees may not even like bank accounts because of the associated monthly maintenance fees (in addition to the debit or credit card maintenance fees). They might prefer to stay with a prepaid debit card and avoid these fees.

  • Rewards: You can also collaborate with your card-issuing company to offer various types of rewards to your employees as incentives for using payroll cards. These can include cashback when they use the card in some stores or extra compensation for meeting certain performance standards.

  • Limited cyberthreat channels: Dealing with cyber fraud might be easier with a DDA payroll card as the only way scammers can access it is through theft.

A lost or stolen payroll card can be blocked and replaced. Once the card has been blocked, there is no other avenue for scammers to exploit.

On the other hand, scammers can access a typical DDA (whether from traditional or online banks) through the associated debit card, bank app, or internet banking login.

  • Personal finance organization: Since employee salaries are the only money entering the payroll card, some have found it easier to monitor how they are spending their remuneration with a payroll card.

This is similar to the advantage of having a salary account separated from other DDAs.  

In addition to its benefits to employees, payroll cards are also time and cost efficient from the employer’s perspective.

Issuing checks for workers on every payday takes time and costs money. Transferring money from the employer to the different bank accounts of employees, while more efficient than checks, is tedious, costly, and complicated due to unsuccessful transactions, reversals, late processing of transactions, and money transfer fees.

If you opt for white-label prepaid cards, there are even more benefits such as higher brand exposure, improved brand image, and increased employee loyalty.    

3. What is a DDA deposit?

Over the years, companies have adopted direct deposit as an alternative to issuing paychecks.

A direct deposit is an electronic transfer of funds from the employer’s account to the employees’ accounts.

If the employee’s account is a direct deposit account, then this deposit is called a DDA deposit. Once the employee receives the money in their account, they can start spending it without any prior notice to the bank.

What makes payroll cards so efficient is that they also support direct deposits. Employers can easily make a DDA bank deposit into a routing number and account number associated with the employee’s prepaid card.

What is a DDA credit deposit?

You may hear the term “DDA credit deposit” used. This simply refers to a deposit from the employer’s perspective. A “DDA debit deposit”, meanwhile, is what employers refer to it as.

What is a DDA bank deposit?

Similarly, some refer to a DDA deposit as a DDA bank deposit, which is the same thing.

4. Benefits of a payroll DDA deposit

But is there any difference between a DDA deposit to a payroll card and a normal bank account?

There is a significant one we already alluded to.

Since you are using the same platform to create payroll cards for all employees, payroll DDA deposits can be processed faster than one sent to different bank accounts belonging to a diverse number of banks.

Anyone who has sent a P2P transfer will know that those are generally faster than a transfer from one platform to another or from one platform to an external bank account. It’s the same speed advantage that applies to payroll DDA deposits.

This benefit can be more pronounced if you have employees across the globe. International wire transfers to various bank accounts might take more time and cost more in fees compared to loading prepaid cards from a single platform.

This increased efficiency leads to more advantages. First, timely salaries are key to employee satisfaction. Employees are happier when they constantly receive their wages/salaries without all the complications that bank account direct deposits cause.

Satisfied employees are productive and loyal employees, which leads to improved business performance and higher retention.  

Boost employee morale and productivity with Berkeley’s white-label DDA payroll cards

At Berkeley Payment, we help companies in North America create white-label payroll cards that make it convenient and efficient to pay their workers. This includes the Canada-based branch of LG.

With us, you can customize your payroll cards with more than 300 features to best reflect your brand, including unique designs, card controls, and transaction reporting.

You can also use our payroll cards to reward employees with bonuses and perks for exceptional performance.

CDIC and FDIC insurance can be added on to these payroll cards to protect customer funds held in the accounts.

For over 17 years, we have worked with established companies in various industries to create virtual and physical cards for various purposes.

Large and small businesses in both public and private sectors use Berkeley’s white-label payroll card solution to empower their workers with flexible finance. Join the growing ranks of satisfied customers who are building happy and productive workforces with a revolutionary payroll system fit for the digital age.

[Are you ready to pay your workers more conveniently and efficiently? Register on Berkeley Payment to start creating safe payroll cards and making secure DDA deposits into them.]


  • Demand deposit accounts are accounts from which users can withdraw money without prior notice to the bank or having to wait for a lock-on period.
  • Payroll cards satisfy these two conditions for being a DDA.
  • Payroll cards have been embraced by employers as a way to pay workers who don’t have bank accounts.
  • Even where employees have bank accounts, payroll cards have proven to be more convenient and efficient.
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