The world of money is going electronic-and you can easily go along for the ride, even if you don't have a computer or a connection to the Internet.

In fact, a new poll shows that nearly two-thirds of Americans have their paychecks deposited directly to their checking accounts. And nearly one-third have at least one bill paid electronically out of their checking account each month. Only 18 percent use pay-by-phone and 15 percent use online bill payment.

This is Direct Deposit and Direct Payment week-a great opportunity to see how easy it is to become part of the new world of financial services. I've been asked to send this message to consumers across the country who may be intimidated by the thought of online banking. In fact, the entire banking industry uses electronics to track and fulfill your payments. It's only the consumer end that remains mired in paper.

Security, greater privacy

But when you have your paycheck deposited electronically into your account on payday, you have the guarantee that the funds will be available at the opening of business. You have the security of knowing you are protected by federal regulations that assure only you have access to your money.

And you have much more privacy. As many as a dozen people may see your paycheck in the process of printing, distributing, and depositing it. Only the computer sees an electronic deposit.

The Social Security Administration has been using direct deposit for nearly two years, and more than 80 percent of Social Security recipients receive their monthly checks via direct deposit. With more than a billion payments made electronically, Social Security says there has never been a lost benefit payment.

You can also have other regular payments deposited directly. Pensions, annuities and dividend and interest payments, as well as regular mutual fund withdrawals for retirees, all can be deposited directly into your account. And the federal government is very big on direct deposit of tax refunds. Financial institutions like it so much- because it removes the cost of tellers and ATMs-that they frequently offer free checking to customers who have funds deposited directly.

Starting process not hard

Consumers are a little slower to catch on to the direct payment side of the equation.

Most people start with regular monthly bills that always require the same payment-a rent or mortgage payment, or a cable television bill. You can easily arrange to have that amount paid out of your checking account on a specific day of the month. If you're worried about being surprised by an unexpected debit for a suddenly larger utility or credit card bill, you should know that those companies are required to notify you 10 days in advance of any debit, so you can dispute any charges.

Getting started on direct payment is easy. Simply contact the billing company and ask them to help you set up the process. They'll be delighted to receive your payments without the expense of handling checks. In fact, many companies will offer special deals to those who pay automatically every month. For example, if you're making arrangements to repay your student loans, you'll receive a rate reduction of one-quarter of 1 percent.

Direct payment is also a great way to fund your Individual Retirement Account. Most mutual fund companies set lower minimums to open an account if you agree to a regularly monthly deduction from your checking account to fund your IRA. It takes about $160 a month in automatic debits to fund a $2,000 IRA. That makes it easy to budget current spending to build your future.

One final word about safety and security. The entire banking system uses the same standards for electronic payments. And these transfers all are covered by Regulation E, which guarantees you against any fraud or loss. But in this electronic system, it's far less likely that errors will occur.

So check it out-or better said, don't use checks. Whether you bank online or just sign up for direct deposit and direct payment without ever touching a computer, you deserve the speed and security of electronic money. And that's The Savage Truth.

Terry Savage is a registered investment adviser for stocks and commodities and is on the board of directors of McDonald's Corp. and Pennzoil-Quaker State Co. Send questions via e-mail at

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