What is ACH: Transfers, Payments, and Charges
If there's one thing you don't want to be confused about, it's money management! It can be tough to keep up with all the terms, systems, and procedures available to take care of your banking needs.
You may have heard the term ACH before, used in reference to payments you make. If you're unfamiliar with it, we’re here to help! Today, we'll explain just what ACH is and how it can make your life financially easier.
What is an ACH Payment?
Here are the basics you’ll want to understand in relation to ACH payments:
- ACH stands for Automated Clearing House, operated by the National Automated Clearing House Association (NACHA)
- ACH payments are electronic payments between banks or credit unions.
- Direct deposits are transfers into an account, typically used for things like payroll, government benefits, and other financial transactions.
- Direct payments are transfers out of an account, such as paying bills or sending money to a loved one.
- ACH transactions are cheaper, quicker, convenient, and are less likely to fail compared to credit card payments.
- ACH payments give you more control over your money than wire transfers.
- Avoid late payments, and save time and money with recurring ACH payments.
There are two types of direct ACH transactions: direct deposit and direct payment.
Direct Deposit: used by businesses, non-profits, or government entities to give money to consumers, often in the form of payroll, interest payments, government benefits, tax refunds, and more.
Direct Payment: used by individuals and businesses to transfer money from one place to another, including sending money to family, making purchases or paying bills.
ACH Payment Types
Direct payment ACHs have two transfers: ACH credit and ACH debit.
ACH credits are push transactions. This means the person (or business) making the payment pushes the money from their bank or credit union account to someone else's.
ACH debits are “pull” transactions, meaning money is taken out of an account, usually when the account holder has given permission to have automatic withdrawals.
What are the Benefits of Using ACH?
Using ACH comes with many benefits and conveniences, such security, cost, and control! ACH transfers empower people to better plan their financial rhythms and avoid the stress that comes with late or missing payments.
ACH payments are easy to create. In a few clicks, you can start collecting money from customers and transferring money in a secure, reliable fashion.
How long does an ACH transaction take?
Payments processed through ACH payment are not immediate. Typically, most ACH payments are settled within 3 business days. The batches in which ACH transactions are processed are only processed at the end of the business day, and only on business days. Due to taking precautions against fraud and money laundering, it can take a few days before the payment enters or exits your account. If there isn’t enough money in an account, ACH transactions can trigger a return notification.
Are there Limits to ACH Money Transfers?
Check the policies! Find out what is and isn’t allowed. Limits to an ACH transfer will depend on the financial institution you’re using. Some of the restrictions could include:
- Charges or fees for insufficient funds
- Caps on how much you can transfer from a savings account.
- Fee for calling customer service to request an ACH transfer
- Monthly limits on how much money you can move.
- International transfer restrictions to banks or CUs outside of the US.
How to Make an ACH Payment or Transfer with a BluCurrent Account
The most convenient way to set up an ACH payment or transfer funds via ACH at BluCurrent is within online or mobile banking:
- Select the “Transfers” tab.
- Select the “From” drop-down menu and choose the account you’d like to debit (or pull) from.
- Select the “To” drop-down menu and choose the account you’d like to credit (or push) to.
A few important things to note:
- You can add an external account by selecting the “From” drop-down menu, scrolling to the bottom and selecting “Add an External Account” and following the prompts.
- Connecting an external account to your account dashboard does not automatically give you access to perform an ACH. You’ll have to add the account within the transfers tab to credit/debit via ACH.
- You can choose the frequency and date your transfer occurs. If you’d like to setup recurring transfers, you’ll want to select the frequency in which you’d like the transfer to take place (weekly, monthly, etc.).
You can also contact a BluCurrent representative to assist you with an ACH transaction. You’ll be asked to fill & sign out a form that allows BluCurrent to setup your ACH request.
Connect with BluCurrent Today
At BluCurrent, we strive to make banking convenient. With convenient digital banking services, we empower our members with the right tools, knowledge, and support to achieve their financial goals and dreams. Launch a video banking call or stop by one of our locations to open your account today!