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Veterans, Active Duty, and Military Families


VA Program Helps Over 200,000 Veterans Receive Benefits via Direct Deposit, Avoid Fraud

Direct deposits are safer, more reliable than paper checks

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En español | The Department of Veterans Affairs’ (VA) Veterans Benefits Banking Program (VBBP) says that it has helped more than 200,000 veterans and beneficiaries switch to receive their benefit payments through direct deposits instead of paper checks.

Doing so helps veterans avoid fraud and ensure they receive their earned benefits in a timely manner. Research found that paper checks are 16 times more likely to be lost, stolen or manipulated than a direct deposit and are 22 times more likely to never be received or arrive late, according to the VA.

Since the agency began helping veterans enroll in direct deposit in 2019, fraud has decreased by 93 percent, it said.

To get a better understanding of how the program works, AARP spoke with Charles Tapp II, chief financial officer of the Veterans Benefits Administration. His responses have been condensed and edited for clarity.

What makes direct deposit a safer payment option?

Direct deposit or electronic funds transfer (EFT) is a safer option because it allows payments to come through routinely without disruption, even if there’s a natural disaster. It also prevents checks from being delayed in the mail or stolen before being cashed. We see the program as a safety mechanism to make sure that our beneficiaries receive their full benefits as they use a traditional bank account or credit union, instead of relying on check cashing services, which charge exorbitant fees.

Who is eligible to participate in the VBBP?

Any veteran with a DD-214 (report of separation) or beneficiary who receives cash benefits from the VA.

How can you sign up for the program?

If you visit the VBBP’s website you will find a list of over 43 banks and credit unions to choose from. Once you choose a bank or credit union, you will be directed to its individual web page. Each financial institution has its own criteria for signing up. Veterans or beneficiaries who have additional questions may call VA at 800-827-1000.

Service members may also visit a participating bank in person and mention the VBBP to enroll.

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Should veterans be worried about being denied a bank account?

The institutions who agreed to participate in the program have agreed to work with veterans who may have a low credit score, legal issues or homelessness. However, each bank or credit union has its own unique and specific criteria.

Why is it important to have a bank account?

We believe it’s safe from the perspective of getting your payments on time, every time. We believe it is safer because if there’s any instances of fraud, the banks are federally insured to protect the consumer.

Outside of receiving benefits via direct deposit, are there other benefits the program offers?

The participating banks and credit unions have committed to working with veterans and beneficiaries to provide financial literacy, insights and information. In addition to helping you get set up with your bank account, they are also there to help with other financial tools and resources available, such as savings accounts, certificates of deposits (CDs) or instruction on how to use your bank card safely.

Veterans may also take advantage of a free session with either an accredited financial counselor through the Association for Financial Counseling and Planning Education or a credit counselor through the National Foundation for Credit Consulting.

Additional financial resources include VetCents, a financial education program for veterans and their families that covers topics like budgeting, and Veteran Saves, a program that helps build financial resilience.

What does this mean for older veterans?

We are very conscious that older populations or those who have historically received checks long-term may have forgotten to include their electronic funds transfer when they first signed up for their benefit. By and large we’re starting to get the older population who are receiving traditional checks or Direct Express Cards to start receiving electronic payments.

Why should a veteran open an account through VBBP instead of going directly to a bank?

Actually, we encourage you to do both. We’re not trying to supersede veterans’ options to go to a traditional bank on their own. We’re doing it to make sure that veterans have options. If a veteran has a bank of their choice we highly encourage them to go to that bank and get signed up for direct deposit.

Are there concerns about fraudsters posing as VBBP?

We are directing people to the website. We’re not asking them to take a blind advertisement saying VBBP. Our website will take them to the list of financial institutions that are safe and are properly insured at the federal level.

Editor’s note: This article, originally published April 2, 2021, has been updated with additional information.

Aaron Kassraie writes about issues important to military veterans and their families for AARP. He also serves as a general assignment reporter. Kassraie previously covered U.S. foreign policy as a correspondent for the Kuwait News Agency’s Washington bureau and worked in news gathering for USA Today and Al Jazeera English.