Same-Day ACH Update
Although, the lag time that has occurred when using your debit card, making a payment over the phone, or writing a check has become convenient for some, this delay will soon be going away. For example, if you pay your cable bill by telephone in the morning, the funds could be cleared from your account before 5:00 P.M. the same day.
On September 15, 2017, the Federal Reserve will start processing same-day ACH (Automated Clearing House) debits. These can originate from your credit union transactions or if you're shopping at your local supermarket or other retailer. Whether you choose to use your card, write a check, or purchase online, large retailers can opt to convert these transactions to ACH withdrawals, the same system that clears your debit transactions.
What is happening?
Consumers, businesses, government entities, and financial institutions utilizing the ACH Network to transfer funds between financial institution accounts and payment services organizations, have the ability to process and accept payments sooner with the ACH update.
How does this affect your account?
Once a merchant or biller has received permission to debit your account, these companies are able to collect the funds as quickly as possible, therefore, always have sufficient funds in your account to cover every payment you make, authorize, or initiate.
If you have pre-authorized an electronic payment, such as a recurring mortgage or insurance payment, then very likely there will be no change to the time that these payments are posted to your account.
Previously, your ACH debit and payment transactions posted to your account once per day, whereas beginning September 15, 2017, ACH debit and payment transactions will post multiple times throughout the business day. Direct deposits will continue to be credited to your account on the correct posting date.
How do you prepare for this change?
Don't assume funds will clear the day after the purchase. Plan for funds to clear at the time you swipe your card, write the check, or authorize a transaction online or over the phone. Make sure to check your checking account balance frequently.
Keeping a low balance can have a negative impact in the event a same-day ACH debit overdraws your account and incurs a fee. Even with courtesy pay or overdraft protection, keeping your account balance at a level that supports your spending is the best way to keep your account in the green.
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