As part of an effort to improve and modernize the U.S. payments system NACHA (the National Automated Clearing House Association) has been making some changes. You may have already noticed a change in the times during the day that electronic Direct Deposits are applied to your account. This change was made to help provide you with faster access to funds. Beginning on Friday, Sept. 15, 2017, the times that certain electronic debit payments post to your account may also be changing. *
WHAT ARE THE BENEFITS OF SAME-DAY ELECTRONIC PAYMENTS?
Many merchants and billing companies may offer you the option to make an electronic payment, such as to pay a bill or to transfer funds. If you agree, then the funds might be debited from your account as soon as that very same day. For example, if you make a payment on the 25th of the month, for the date of the 25th, the funds can be debited from your account on that day. There will no longer be a guaranteed overnight to a few days processing time for payments to post to your account. If the funds are not available in your account, your payment may be returned. While these types of payments won’t be reflected on your account balance as quickly as your debit card and ATM transactions, you will have access to more accurate information about your actual available account balance more frequently throughout the business day.
WHAT YOU SHOULD KNOW
- When you authorize a merchant or biller to debit your account with your financial institution, the merchant or biller should include information or a statement about the timing of the payment. If the merchant or biller offers you the option to make a same-day payment, it might be referred to as a same-day payment, or noted that the merchant or biller intends to collect the funds as quickly as possible.
- If you already 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. As always, financial institutions will receive and post these payments normally as designated by the transaction effective date.
- You should always have sufficient funds in your account to cover every payment you make, authorize, or initiate, and you should frequently review your account statements and transactions.
* These electronic debits are commonly known as Direct Payment, Direct Debit, ACH Debit, Electronic Check or e-Check, and similar terms. They are different from your debit card payments and ATM transactions.