Over the past few years, the Canadian Federal government have been encouraging taxpayers to receive government related payments through direct deposits. Government related payments includes tax refunds and GST/HST credits from the Canada Revenue Agency (CRA). Approximately 80% of government related payments are issued by direct deposits. If you haven’t opted to receive your government payments through direct deposit, I strongly encourage you to sign up now.

Main Benefit

As I’ve mentioned in several of my posts, such as the Millennial Savings Guide, personal financial management is significantly easier with automated cash flows. Through direct deposit payments, the funds are available right away. This eliminates the old fashioned process of waiting for the cheque, and travelling to the bank to in order to deposit the cheque (keep in mind, the cheque may also be on hold after it’s deposited). CRA direct deposits are fast, convenient, reliable, and secure – just like any other direct deposits you receive.

How to Apply

There are several ways to apply for the CRA direct deposit (and other government related payments). For all of these methods, you need your bank information, which consists of a 5 digit transit number, 3 digit institution number, and an account number (maximum 12 digits). This information can be found on online banking, or on your bank statements.

Phone Call:
Contact the Public Services and Procurement Canada at 1-800-593-1666 in order to set up your direct deposit info. This can be found on your bank statements or online banking.

Online:
There are different channels for specific payments – the specific channels can be accessed on directdeposit.gc.ca. For CRA direct deposits (i.e. income tax refunds), the info can be set up through CRA My Account – where the bank information would be inputted. This can be filled out in the direct deposit section under the Accounts and Payments tab.

If you don’t have CRA My Account, I highly recommend signing up for this service – makes managing your current and past tax documents much easier. There are other features, such as checking your TFSA and RRSP contribution limits.

By Mail/In Person:
The direct deposit form can be printed out and mailed to the CRA. This can also be done at most Canadian financial institutions. Your bank will be able to assist you in completing this form, which would be mailed out to the CRA on your behalf.

Bottom Line

Government direct deposits save taxpayers $17 million a year, according to PSPC. This convenient method reduces emissions and keeps your money safe. For signing up, I recommend the online method –  it would processed almost immediately. It’s the quickest way to set up your CRA direct deposit, and this method only takes a few minutes. All in all, receiving paper mail consists of waiting for your money to arrive in the mail, going to the bank, and potentially waiting in the line before receiving your money. Signing up for direct deposit makes your personal finances simpler – for more information, visit Public Service and Procurement Canada.

You May Also Be Interested In: Mastering Your Finances

Writer: Jelani Smith

Disclaimer: All investing can potentially be risky. Investing or borrowing can lead into financial losses. All content on Bay Street Blog are solely for educational purposes. All other information are obtained from credible and authoritative references. Bay Street Blog is not responsible for any financial losses from the information provided. When investing or borrowing, always consult with an industry professional.