RHS brokerage deposits are a way to move money into an investment account through your bank's direct deposit system

An RHS brokerage deposit is a direct deposit arrangement that sends your paycheck or other regular income directly into a brokerage account rather than a traditional checking or savings account. RHS stands for "Receiving House System" — the infrastructure that brokerages use to receive direct deposits on behalf of their customers. Instead of your employer depositing funds to your bank, the money goes straight to your brokerage firm, where it sits in a cash management account or money market fund until you decide to invest it.

This is different from a standard bank direct deposit because the receiving institution is an investment firm, not a bank. Your employer's payroll system routes the deposit through the same ACH network, but it lands in an account controlled by your brokerage rather than a financial institution. The money is still yours immediately — you can withdraw it, move it, or use it to buy investments without delay.

Key Takeaways

  • RHS brokerage deposits send your paycheck directly to a brokerage account instead of a bank, using the same ACH system your employer already uses.
  • The money arrives in a cash management or money market account at the brokerage and is available to invest or withdraw right away.
  • You need your brokerage's routing number and your account number to set up the deposit, which you can usually find in your account settings or by calling the firm.
  • Not all brokerages offer RHS deposits, so you should confirm your firm supports the service before asking your employer to change your direct deposit.
  • The main benefit is convenience — you don't have to transfer money from a bank to your brokerage, so funds are ready to invest immediately.

How to set up an RHS brokerage deposit with your employer

Start by logging into your brokerage account and finding your routing and account numbers. Most brokerages display this information in the account settings, under a section labeled "Direct Deposit," "Bank Information," or "ACH Details." If you can't find it online, call your brokerage's customer service line — they can provide both numbers and confirm that your account is set up to receive direct deposits.

Once you have those numbers, go to your employer's payroll system or HR department and request a change to your direct deposit. You'll enter the brokerage's routing number as if it were a bank routing number, and your brokerage account number as the account number. Some employers allow you to split your paycheck between multiple accounts, so you could send part to your brokerage and part to your bank if you prefer.

After you submit the change, your employer will usually process it within one to two pay periods. Your first deposit may take longer — sometimes up to a week — because the payroll system has to verify the routing and account numbers. Once it goes through, future deposits should arrive on your normal payday.

Which brokerages offer RHS deposits

Major brokerages like Fidelity, Charles Schwab, E*TRADE, and TD Ameritrade all support RHS direct deposits. Smaller or newer brokerages may not, so check your firm's website or call before you set up the deposit with your employer. If your brokerage doesn't offer RHS deposits, you'll need to use a traditional bank account and transfer money to your brokerage when you're ready to invest.

Some brokerages that focus on retirement accounts, like certain robo-advisors or niche investment platforms, may have restrictions on direct deposit. If you're unsure, the fastest way to confirm is to look for a "Direct Deposit" or "ACH" section in your account settings, or to contact customer service directly.

Where the money sits while it waits to be invested

When your paycheck arrives at your brokerage via RHS deposit, it lands in a cash management account or money market fund. This is not the same as a checking account — it's a holding area within your brokerage where uninvested cash earns a small amount of interest. The exact rate depends on the brokerage and current market conditions, and it changes over time.

You can leave the money there indefinitely, withdraw it back to your bank, or use it to buy stocks, bonds, mutual funds, or other investments. There's no penalty for keeping cash in the account, and no requirement to invest it by a certain date. The money is yours to do with as you choose.

Advantages of depositing directly to a brokerage account

The main benefit is speed and convenience. Your paycheck is already where you want to invest it, so you don't have to wait for a deposit to clear at your bank, then transfer the money to your brokerage. This is especially useful if you invest regularly or use a strategy like dollar-cost averaging, where you buy a fixed amount of an investment every payday.

A secondary benefit is that you reduce the number of accounts you have to manage. If you're focused on building an investment portfolio, having your income flow directly into your brokerage can simplify your financial life. You still need a bank account for bills and everyday spending, but your investment capital doesn't sit idle in a separate place.

Risks and limitations to consider

The main limitation is that not all brokerages offer RHS deposits, so your options may be restricted depending on which firm you use. If you switch brokerages, you'll need to update your direct deposit information with your employer again.

Another consideration is that if your brokerage goes out of business or experiences a system failure, your direct deposit could be delayed or misdirected. This is rare — major brokerages are heavily regulated and insured — but it's worth knowing that your paycheck is now dependent on a brokerage's infrastructure rather than a bank's. If you're uncomfortable with that risk, you can always keep your direct deposit at your bank and transfer money to your brokerage manually.

Finally, if you're not disciplined about spending, having your paycheck go directly to an investment account removes a natural checkpoint. You won't see the money in a checking account first, so you need to make sure you've set aside enough for bills and expenses before the deposit arrives.

Changing or canceling your RHS deposit

If you want to stop using RHS deposits or switch to a different account, go back to your employer's payroll system and update your direct deposit information. You can change it to a bank account, a different brokerage, or split it between multiple places. The change usually takes effect within one to two pay periods.

Your brokerage won't charge you to stop receiving deposits, and you don't need to notify them — the change happens on your employer's end. Any money already in your brokerage account stays there until you withdraw it or invest it.

Frequently Asked Questions

Do I need a special type of brokerage account to receive direct deposits?

No. Any standard brokerage account — whether it's a taxable account, IRA, or 401(k) — can receive direct deposits if the brokerage supports RHS. Some retirement accounts have restrictions, so check with your brokerage if you're unsure about your specific account type.

What happens if I enter the wrong routing or account number?

Your employer's payroll system will usually reject the deposit and send it back, or it may fail to process at all. Contact your brokerage and your employer's payroll department to correct the information. Once it's fixed, the next deposit should go through normally.

Can I split my paycheck between my bank and my brokerage?

Yes. Most employers allow you to set up multiple direct deposits, so you can send part of your paycheck to your bank and part to your brokerage. This is useful if you want to automate your savings while keeping enough in checking for bills.

Is my money safe in a brokerage cash account?

Yes. Cash held in a brokerage account is protected by SIPC (Securities Investor Protection Corporation) up to $250,000 per account, and many brokerages carry additional insurance. The money is yours and is not at risk if the brokerage fails, though in rare cases a transfer to another firm could take time.

Can I use RHS deposits with a 401(k) or IRA?

It depends on the brokerage and the account type. Some brokerages allow RHS deposits into IRAs and self-directed 401(k)s, but not all. Contact your brokerage to confirm whether your specific account can receive direct deposits.