Inflation makes people live hand to mouth. This is how some banks respond

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New York (CNN Business) -- 

"Pay Friday" may soon be replaced by "Pay Wednesday."

JPMorgan Chase, the largest bank in the United States, this week became the latest financial institution to offer customers early access to their direct deposits.

Chase, the consumer and commercial banking arm of JPMorgan Chase, announced that its 1.4 million Secure Banking customers will automatically receive access to certain direct deposits such as payroll, tax returns, government benefits and pensions, up to two days before .

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Offering access to major direct deposits a day or two in advance could help customers, especially low- and middle-income households living paycheck to paycheck, pay their bills on time, avoid late fees and make against unexpected expenses, said Ryan MacDonald, head of growth financial products at Chase.

"For them, the interval between the cashing of the check and the due date of the invoices is usually a big problem," he said.

"To fix that, we're looking to close that gap."

Chase joins a growing list of fintechs and traditional financial institutions, including Chime, Current, Capital One and Wells Fargo, in offering customers early access to their money.

Also, in the last year, several banks such as Bank of America, Citi and Chase have started to eliminate overdraft fees.

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Services such as early access to direct deposit and the removal of overdraft fees come at a time when historically high inflation is depleting consumers' excess savings, said Mark Hamrick, chief economist at Bankrate.

"At a time when prices have been consistently high, that has taken away the purchasing power of consumers," he said.

"It means that every dollar that's in the bank is getting more and more valuable."

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The Federal Reserve has implemented a series of massive interest rate hikes to curb rising prices.

But in recent months, inflation has remained stubbornly high, prompting the Fed to continue its blunt approach and raising the risks of a sharper and more painful economic slowdown.

"We're in an environment where it's widely accepted that the risks of a recession are high," Hamrick said.

“That means the risk of rising unemployment is also high. So if there is a disruption to income, that means individuals are going to face more financial stress.”

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