ACH is also known as an automated clearinghouse. So whenever someone uses the term ACH transfer, he or she is making an Automated Clearing House transfer. Just like most transfers, it is done electronically between different banks and allows the money to either be pulled or pushed from an account or to an account.
It is one of the major ways known by people now to send or receive money. The ACH transfers are in charge of the online bill payments made by you and the deposits gotten by you. It also has other transfers attached to it.
One main advantage of the ACH transfer is in the business world because most times the businesses we know, deal with buying and selling. With this in mind, we know that there would be a lot of transactions between customers and the business enterprise. The ACH is a very fast way of receiving money and sending it too. Of course, there is the option of paper checks, this only takes longer to cash. This is why most businesses today use the ACH transfer system. It has not just helped the business world but the financial network today has improved based on this development. The guide tells us how to push ACH transfers on the bank of America. Although, we need to know what an ACH transfer is and the information needed to execute the transfer.
Jump To A Section
- 1 What ACH Transfer Is All About
- 2 Details Needed For Push ACH Transfer On Bank Of America
- 3 How To Push ACH Transfer On Bank Of America
- 4 A Table Showing ACH Transaction Limits
- 5 How Much Does It Cost?
- 6 How Is An ACH Transfer Different From A Wire Transfer?
- 7 Conclusion
What ACH Transfer Is All About
An ACH transfer is a way of moving money electronically between banks through the automated clearing house network. For easier understanding, we could say that the ACH transfer is the placement of money electronically from one bank to another bank. Using the automated clearing house network. The ACH transfers are things like bill payments, direct deposits, payments from different businesses to other businesses, personal payments, and government benefit funds payments.
This is a fast-growing network used to transfer money payments electronically throughout the United States of America. The ACH network has an upper body that sets its regulations this body is known as NACHA(National Automated Clearing House Association), it is also known as the ACH scheme. This body requires every individual using this network to follow every rule that they have put in place regarding transactions. Failure to adhere to any of the protocols put in place would cause your electronic payment to be declined.
Details Needed For Push ACH Transfer On Bank Of America
Before you’re your ACH transfer is approved, you would need the following details available:
2. Routing number
3. Account number
4. Details on the type of account
5. Transaction amount
If the account you are transferring to has a checkbook privilege, the account and routing number should be available at the bottom of the check. Nowadays, the accounts at credit unions can only make payments via the ACH network. They also request for the nickname on the account but that is optional unlike every other piece of information. Your information should already be attached to the account so the app most times fills that in for you.
The payment amount being made isn’t seen as one of the ACH requirements but it is needed when making a one-time transaction. Now, these details given would help you through the next process, we will bee giving you the steps to take to complete a transaction successfully.
How To Push ACH Transfer On Bank Of America
Executing an ACH transfer is just simple, so are the steps below.
Put Together The Necessary Information That You Need
Just like we have mentioned before when we told you about the information you need, the account number, type, routing number, and transaction amount are very important. The routing number might not be gotten easily but if the account has check privileges then the bottom of each check paper should have the routing number written. Aside from normal bank accounts, the accounts at credit unions can also be used to make ACH payments.
Select Between The ACH Debit And ACH Credit
Before executing the payment correctly, you would need to differentiate between an ACH debit and an ACH credit. Let us differentiate them for you. The ACH credit is the kind of payment used for bill-paying services. For this kind of transaction, you have to give your financial institute to send payment to the payee(bank of America account). For example, when making a car loan or paying the utility company. Your account details as the sender remain with your bank, they are not sent to the payee.
For the ACH debit, the transaction with the payee has to be established. In a situation like this, your payment details are submitted to the payee. Although, this kind of digital payment means that there are greater risks than the latter ACH credit.
Both electronic payment methods follow the same steps and cost the same amount to execute.
Perform The ACH Transfer
Before you go ahead and make the transaction through the Automated Clearing House you have to complete some paperwork, although the form nowadays comes through electronic means, it can be filled on your phone. Some financial institutions still go old school and send hard copies. Both methods have the same steps to follow, here they are:
1. Link accounts. This is a step that isn’t too complicated, it is mandatory so you would need to know how it works. For this step to be completed, all of the information unmentioned above has to be provided and given to your financial institution.
2. You would also have to choose the type of account where the transaction is originating from.
3. Input the payment amount
4. Choose the payment date. This is done in some banks where post-date transactions are made.
Be Ready For The ACH Transfers From Customers
When operating a small or large business, you would have to agree on receiving ACH payments from customers. This method makes business transactions easier and faster.
A Table Showing ACH Transaction Limits
|Amount limits||Most times for most accounts, there is a fixed amount for daily or monthly restrictions for the amount you can move|
|Cut off times||After a certain hour of the day, your transfer might not be processed and won’t go through until the next business day.|
|Fee for insufficient funds||When you make a transaction that exceeds the money in your account then the bank has the right to charge you and cancel the transfer|
|Transfer limits||Every bank has been required to give limits to accounts for certain transactions.|
How Long Does IT Take For The Push ACH transfer On Bank Of America To Work?
For transactions of ACH transfers to be delivered, it takes numerous business days. These are the days that the bank is open, not during the weekend or holidays. It is not like the time it takes to process wire transfers because it is processed by a network operator in different batches and so it is done only seven times a day. Financial Institutions can decide to have the ACH credits processed and delivered in one day or possibly two business days. The timelines that they follow are based on the rules given to them by NACHA, the body in charge of this network. Before you receive the money, the money is held by a bank or credit union until it is delivered to you. NACHA allows every bank to process and deliver the transaction in one day but the bank now takes it upon itself to determine its delivery date.
How Much Does It Cost?
ACH debit transfers like the payroll direct deposits and other bill payments are free. Although every other kind of payment could cost you a charge. For the ACH credit transfers made by people, banks charge a minimum of 3 dollars for sending money between your accounts at different banks. Many financial institutions give out these external funds transfers for free. Individual transactions that you make through banks or other apps like PayPal might cost you a fee depending on the platform used.
How Is An ACH Transfer Different From A Wire Transfer?
This is a bit confusing because both transfer methods work electronically, some people think that there are no differences but they are wrong. Wire transfers take a shorter time to complete. In some cases, wire transfers take one day to complete, in most cases, it takes lesser than that. Wire transfers are done amongst international banks. The ACH network only works in America and banks within America. The ACH transfer is cheaper than wire transfers, every transaction could cost you 30 dollars for a wire transfer, but the ACH transfer would cost you less than 3 dollars, although it is free most times.
Although ACH transfers and transactions is a simple way to move money around, when you are the one sending the money, it is best to go through the policies set by your bank.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.