Federal government cheques are going the way of the penny. The federal government is phasing out cheques in favour of direct deposit as part of a $17.4 million cost-cutting measure announced in the 2012 budget.

The switch from paper to electronic payments will affect things such as Old Age Security, Canada Pension Plan, Child Tax Benefit and pension payments for veterans and retired federal public servants, among others. The move means Canadians who currently receive federal cheques by mail will receive their money faster and more reliably through electronic deposits made directly into their bank accounts. Unlike Internet banking where a computer is required, direct deposit simply means the money is deposited electronically.

Currently, the federal government issues more than 275 million payments a year to individuals, businesses, federal employees and federal government pensioners. More than 80 percent of federal payments made to Canadians are already done by direct deposit while the remainder have until 2016 to make the switch so no one gets left behind. There are some exceptions to the no-cheque policy, such as for certain Canadians living in remote areas or those without a bank account.

Canadians wishing to register for direct deposit should talk to their bank or financial institution, apply at www.directdeposit.gc.ca or call 1-800-O-Canada.