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What Same-Day ACH Debit Means for You


Phase two of Same-Day ACH recently kicked in. Now, electronic payments or debits you authorize will post to your account the day you authorize them.

With phase one, money got to your account faster, now it goes out faster. What do consumers need to be aware of?

“I don't have a sense that consumers have any control behind the scenes of when this new faster processing method will be used or won't be used. Consumers who are used to paying by check in person may find that their checks clear faster, so they better have enough funds in their account to cover it. Similarly, paying with a debit card may result in the funds being withdrawn from their account on the same day. Again, they should not count on any float time. Checks they deposit in their bank account may also clear faster and thus be available to them sooner. But again, the consumer doesn't control what clearing method the bank may be using,” says Edgar Dworsky, founder of Consumer World.

People should keep in mind the following. There is a $25,000 transaction limit and no international transfers are permitted.  Some financial institutions may charge fees for the same-day option. You are restricted to certain time frames in order to qualify for same-day debits. There is a shorter time window to adjust dollar amounts or to cancel an item.

There is a $25,000 transaction limit and no international transfers are permitted. Some financial institutions may charge fees for the same-day option.

But, there is an upside. “Same-day ACH debit transactions will be most helpful for processing last-minute payments to loans, mortgages and credit cards so that the consumer avoids a late fee or interest charges.  These transactions may also be helpful for sending funds for other purchases or to transfer money to another bank account.  Before the same-day debit option, consumers would have to pay to wire funds or use standard ACH or bill pay options. Outbound wire transactions can cost between $20-$45 and bill pay options are a slower payment option, especially for first-time payments, which are often sent by paper check,” points out Dana Vas Nunes, senior manager of deposit products at Alliant Credit Union.

Vas Nunes highlights what you most need to know. Ask your financial institution if the transaction they have authorized will be processed as a same-day ACH or a standard ACH debit.  Not all financial institutions will offer same-day debit originations. Or, they may offer them at a later date. The legal requirement states that all FIs have to receive same-day debits but are not required to originate at this time.

The legal requirement states that all [financial institutions] have to receive same-day debits but are not required to originate at this time.

Pay special attention to the cutoff times for processing same-day ACH debits. Each financial institution may have its own cutoff times to ensure that the debit occurs the same day.  Also, recognize that “same day” may mean 5 p.m., which may not be soon enough to make other financial arrangements. Additionally, some financial institutions may charge a fee for the same-day service as the costs to the bank are higher for these transactions. Same-day clearing provides little opportunity to stop or reverse payments once authorized and completed.  Expected posting will occur at the end of the business day local time. In March 2018, all financial institutions will be required to complete posting by 5 p.m. local time.

What’s key for managing the new rules? Vas Nunes offers a few tips, “Be sure you know the cutoff times for your payment and your financial institution’s cutoff time for processing same-day debits. Pay careful attention to time zones as well!”

Secondly, she says you need to have the two bank accounts linked before the same-day debit can occur. Each financial institution has its own way of verifying accounts at other institutions. Some use the consumer’s online banking user ID and password and others use a “trial deposit” method for verifying account ownership. She says, “If it’s the latter version, this could take an extra day to process. Be sure to enter the correct account information and loan number. Otherwise, the transfer may be rejected and you may be notified of the rejection after the cutoff time.”

ucla   |     |   Comment #1
again ken. provides vital info
what a great site!
where elsecould you find out about this stuff?

Joey   |     |   Comment #4
What stuff, what did you learn from this article that a common sense did not tell you about one day ACH or you didn't know before?
Kaight   |     |   Comment #8
Uh-oh. Who was that nasty person who spilled ginger ale into your Cheerios?
Martin   |     |   Comment #2
Very poorly written article. There is so much missing info for anyone to learn the details of "day transfer ACHs".
First, there is no standard cut off time to send or receive the ACH, therefore the banks and the CUs are allowed to cheat, some will set the cut of time like Alliant CU at 1PM and the receiving institution has cut off time at 5PM and if you a late one second after 1PM the money will be delivered 48 hours later and if weekend or holiday, it may arrive 3-4 days later.
Paying with checks using check 21, is over 15 years old news. Yes, check 21 works like same day transfers if the banks and the CUs are honest, but so far no such luck.
Furthermore, every FI has its own rules for availability of funds, even if the money arrived in 2 seconds, there may be a hold of few days, loophole in the system I guess. I have seen banks post the transfer received the same day, but it says: "available in 5 business days".
Also, the banks and CUs can cheat by using the transfer/received codes to make our life miserable, like:

Return Code Description
A. Not Sufficient Funds
B Uncollected Funds Hold
C Stop Payment
D Closed Account
E Unable to Locate Account
F Frozen/Blocked Account
G Stale Dated
H Post Dated
I Endorsement Missing
J Endorsement Irregular
K Signature (s) Missing
L Signature(s) Irregular
M Non Cash Item
N Altered/Fictitious Item
O Unable to Process
P Item Exceeded Dollar Limit
Q Not Authorized
R Branch/Account Sold
S Refer to Maker
T Stop Payment Suspect
U Unusable Image
V Image Fails Security Check
W Cannot Determine Account
If any of these codes are attached to checks or even ACHs, the funds transfered can be on hold for days or weeks and the consumer can not do anything about it.
One day transfer has neutral rating at many banks and CUs, because there are no standard rules or regulations and they are allowed to set their owned sub-rules and company regulations outside of this framework.
Bogie   |     |   Comment #3
I do numerous ACH transfers with various banks and CUs. Never had any of the problems mentioned. Natural those transactions can be completed on normal business days only. Weekends and holidays were always excluded.

I also received interest at times when the funds were on "hold" by the receiving financial institution. On "hold" meant only that I could not withdraw those funds while for that time.
Joey   |     |   Comment #5
I had many ACHs returned unpaid due to "funds availability" issues, but the real reason is the banks wanted to create float on a $150k ACH sent on Friday and cleared the next Friday, on one day ACH scheme. Receiving interest when the funds are on hold is nothing new, but this article did not say anything about it either.
newairportday   |     |   Comment #6
But it's all up to the individual credit union.
And it's mostly for people living on the east coast.
Where it won't normally work is for people living on the west coast, wanting to do same-day ACH to institutions on the East Coast, because of the cutoff times.

I typically use a local, large (in the top 15 nationwide) CU to ACH funds to my Alliant accounts. They usually send ACHs out around 10 - 11am local (Pacific) time (as their system will still accept it for same day "sending" until about 10:30am). But it always shows "tomorrow" delivery to Alliant, maybe because Alliant's cutoff time of 12 noon would be 10:00am local time here -- before the local CU sends out their ACHs for the day.

So it's pretty much useless for people on the west coast trying to ACH to accounts on the east coast. Those will still show up "tomorrow" in real world situations, because of cut-off times.

Except of course NavyFed, where, like lost luggage, it'll show up next year -- that is, before Navy then "recalls" the outgoing ACH as they have done before with me -- as NavyFed doesn't even ALLOW you to ACH funds out of savings accounts -- only to put money INTO their savings accounts. So they let it go out, then recall it back. Which is why I use Navy for nothing but CDs.

But getting back on subject, same day ACH won't happen in reality if you live on the west coast and have to same-day ACH to the east coast because of cutoff times and the time difference.
Bogie   |     |   Comment #7
"same day ACH won't happen in reality if you live on the west coast and have to same-day ACH to the east coast because of cutoff times and the time difference."

That is completely understandable and not controlled by individual financial institutions policies.

Kaight   |     |   Comment #9
NavyFed savings accounts have long been recognized as the "Roach Motels" of savings accounts. Your money can check in via ACH, but your money can never check out via ACH.
Anonymous   |     |   Comment #14
Could you clarify regarding NavyFed? If I am closing a CD, I normally close it and transfer proceeds to savings acct and then use my other institution to ACH-pull that money. Would that not work when closing NavyFed CD? If I pull money from another institution (i.e. txn initiated somewhere else), would not NavyFed release it like rest of the banks I've delt with?
Kaight   |     |   Comment #16
You are not permitted, under NavyFed rules, to use ACH to debit a NavyFed savings account. Read their rules. It's in there! And it matters NOT where the ACH is originated. Specifically, ACH transfers initiated external to NavyFed, and attempting to debit NavyFed savings accounts, will not be honored and will go unfulfilled.

To move out funds located in NavyFed savings, via ACH, those funds must first be transferred to your NavyFed checking account. Only then can the funds be removed using ACH, with the ACH pull pointed at your checking account, never directly at your savings account.
thisspaceavailable   |     |   Comment #18
NavyFed being NavyFed (with policies that don't favor the consumer) doesn't allow you to ACH FROM their savings accounts -- only TO their savings accounts. If you initiate a pull from another institution, it'll "go through" for about 24 hours -- then NavyFed will institute a "recall" to get the funds back. Trust me, they've done it to me because I didn't realize they were this backward. That's why I don't do anything with Navy except CDs. From what I understand, they supposedly allow ACH withdrawals from checking accounts, but I would never get a checking account with them. I can confirm though, that if you're talking savings accounts, you CANNOT move funds AWAY from a NavyFed Savings account. If you try to do it via the other institution, it'll look like it'll go through for a couple days -- until NavyFed calls the money back. This (along with other bad Navy policies -- like having to wait a full week for money to be credited to your account if you make a deposit at a Co-Op ATM -- though withdrawals are naturally taken away immediately) is why the only thing I do with Navy is CDs, and use Alliant and other better choices for savings and checking accounts. I can go into a Navy branch in person when a CD matures. If you don't have that luxury, you can pay a wire fee, or have them send you a physical check in the mail.
me1004   |     |   Comment #10
There is a serious problem with the new same-day ACH debiting. It could mean that you have to have the check covered a full day in advance of writing it -- because of how some banks or CUs post these things. Without better regulations about how transactions must be processed, you could be getting set up for a lot of bounce fees even if you make a deposit to cover those transactions first.

For instance, some banks or CUs will process debits as they come in but not process deposits to your account until that evening even if you made the deposit first, leaving you subject to bouncing check or ACH withdrawals all day. (I have had this very problem with Alliant with scheduled transfers set up well in advance, and they wait until after they have processed any withdrawals coming in over the course of the day to process the transfer deposit to checking they were instructed weeks in advance to do that day; a reasonable person would think that deposit to checking would be done at 12:01 a.m. as an automated transaction entered in advance. But Alliant won't do the deposit until the last thing that night, and so incoming withdrawals are bounced all day, piling up bounce fees. Despite complaining about it in writing, Alliant still does it. You better expect this to be compounded by same-day ACH, and Alliant's 2 p.m. cutoff for deposits to be processed same day.)
SYC   |     |   Comment #13
Ditto for Ally Bank. 

This actually happened to a trial deposit debit (to reverse two same day trial deposit credits) from another bank to my Ally Bank account with $0.00 balance.   The trial debit was processed before the two trial deposit credits.  This caused an overdrawn account balance and an overdrawn fee.  This fee was manually reversed after they realized what had happened.
Sandra   |     |   Comment #15
I always keep a minimum $2 in savings accounts to cover that possibility.
Att   |     |   Comment #11
A grocery store near me takes your paper check. Scans it in the register and takes the funds immediately out of your checking account. They return to you the paper check
Bogie   |     |   Comment #12
I see that more and more around the country. A growing trends when paying by check?

I never write a check without having the funds already available in my checking account. Never in my life had a check bounce, not one.
Sandra   |     |   Comment #17
I'm curious, does the merchant incur a fee to do that?
Att   |     |   Comment #19
If they do pay a fee probably worth it because people bounce a lot of checks.
Martin   |     |   Comment #20
Att, you can not bounce check 21 converted and paid on the spot with ACH transfer. The bank(s) will be held responsible if a transfer is not processed as valid, because the transaction number issued to the merchant is a voucher for the real (live) transaction took place and is guaranteed by the bank that the funds are secure and will be paid.
Att   |     |   Comment #22
I should have been clearer. If the store pays a fee to ACH the check like in the example I mentioned, it is for good reason; People bounce paper checks.
Martin   |     |   Comment #23
Att on comment #22, I do not like to argue with anyone, but People who bounce checks wind up in jail, it is criminal offense to steal via bad checks. Second, the bank will close such accounts with bouncing checks and put a nasty code in your credit file that may forbid opening other bank(s) account(s) ever.
Third, no merchant ever takes checks without ID and if the check is for over $100, a valid credit card number may be needed and or fingerprint.
Ask anyone who has tried to pass a bad check, why the police and or the sheriff departments have an arrest warrants for such people. The time of bouncing checks is over and with check 21 the bank guaranty 100% payment with a merchant.
By the way, the ACHs are free to the merchants who process their debits with a bank where they have business account established. Depending on the account type, the first 10000 transactions are free per month, after that number, I think is 10 cents per debit processed.
Att   |     |   Comment #24
I doubt anyone goes to jail if they bounce a check. Years ago I worked in retail and we had lists of people who bounced checks. The police were never called. A check that is returned for insufficient funds is considered a bounced check. People pay bills via the mail and bounce payments. Many institutions charge return check fees too. Banks make bog bucks on returned checks too.

Now if you forge a check or financial instrument that is a different story. You can be prosecuted.
slovokia   |     |   Comment #21
Until all banks actually make their ACH procedures fully transparent and transfers trackable on both ends most of their customers will have to guess how things will actually work in practice. It will be interesting to see how a bank like Ally exposes the new ACH features to their customers. Will they allow larger transactions to be split into multiple same day $25K transactions?

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