q2 answer

Answer: Direct deposit involves five parties; the employee, the employer, the employer's bank, the Federal Reserve, and the employee's bank. The entire process occurs in a 24 hour period. The employer authorizes the deposit on one day and funds appear in the employee's account the next. The employee authorizes the employer to have the amount due from payroll electronically transmitted to their bank and account. The employer sets aside the amount due to the employee in their bank and requests a transfer of funds to the employee's bank. The employer's bank transfers funds to the Federal Reserve Bank with instructions relative to the employee's bank and account information. The Federal Reserve collects the deposit and re-distributes funds to the employee's bank with instructions relative to a specific account.