This is one of the easiest — and most effective — ways to save more money

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Need to give your savings account a boost? Splitting part of your direct deposit from your paycheck into a high-yield savings account or an investment account is all it takes to put your savings on autopilot.

Generally, a portion of your paycheck will go into a checking account to pay bills and other expenses. The portion that you’re comfortable storing away to build or add to an emergency fund can go in a high-yield savings account, where it can earn more interest and you’ll be less tempted to spend it.

Whether it’s a percentage of your paycheck or just a set dollar amount each paycheck, having this money split off into a high-yielding savings account is going to allow you to start a savings foundation or add to your existing account without even realizing it.

“Without even thinking about it, without lifting a finger, it’s being set aside,” says Jane Larimer, president and CEO at the National Automated Clearing House Association. “… It’s that easy. And I think sometimes people don’t think about — they think, well if I only have a few dollars, why do it? Well a few dollars adds up over time.”

How to set up a split deposit

The first step toward setting up a split deposit is to talk to your employer or login to the same place where you can view your paycheck, if your employer offers this capability. This might also be the same place that you added your routing number and account number for direct deposit.

You may be able to divide your paycheck based on either a percentage or a specific amount. This process may be called changing your bank elections, or it may be under the choice of adding or editing your accounts. Other employers may have a form that you’ll fill out. And if your employer doesn’t offer split deposit, consider asking for it.

“If their employer doesn’t offer it, encourage them to offer it,” Larimer says. “Sometimes they just need to hear from their employees first.”

If your employer doesn’t offer split deposit, you may be able to do a recurring transfer from checking to savings automatically at your bank. If you’re depositing the check, you also might be able to deposit most into checking and some into your savings account – if they are at the same bank. If they’re not, there may be a way to set up recurring transfers to your high-yielding savings account.

If you have an existing savings account, that’s a great start – but make sure that it’s earning a top yield. Otherwise your money isn’t working its hardest for you.

Most Americans need the extra savings

According to a recent Bankrate survey, nearly 40 percent of Americans would need to borrow money to cover a  $1,000 emergency.

But the savings problem may be even worse. The Federal Reserve also released a study in May 2018 that found 40 percent of people can’t afford a $400 emergency. Larimer says a $20 split deposit each paycheck can make a big difference. If people are paid twice a month, $480 would accumulate in a year – not including interest. That amount would put you on the right side of the Federal Reserve study.

Starting to save can be painfully slow at first, says Lauren Zangardi Haynes, CIMA, a certified financial planner at Spark Financial Advisors.

“Whether you’re investing or putting it into a savings account, in the beginning it feels like you’re not making any headway,” Zangardi Haynes says. “But then if you stick with it, consistently … once you look back at the end of the year, you’ll see that you’re no longer a part of that statistic of not being able to afford a $400 emergency.”

“Many people have a feeling that there’s just absolutely no room in their budget,” Zangardi Haynes says. “But what happens is that we’re actually surprisingly flexible in terms of many of our spending choices. … I don’t think people give themselves enough credit for their ability to adapt.”

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Written by
Matthew Goldberg
Consumer banking reporter
Matthew Goldberg is a consumer banking reporter at Bankrate. Matthew has been in financial services for more than a decade, in banking and insurance.