Posted by Tina Brandon on Nov 01, 2016

Same day ACH is now a reality for initiating credits.  For debits, same day ACH will be available next year.

 ACH is a form of Electronic Funds Transfer or EFT.  Each time you pay or receive salaries and wages, make direct deposits, pay for utilities or conduct any other transaction, the funds move through the ACH network.

The National Automated Clearing House Association or NACHA is the organization that regulates the activities of the ACH. It has initiated a new and innovative additional network functionality to streamline and speed up the fund transfers.

This approach is termed as Same Day ACH. Here’s how it works.

 Same Day ACH Windows

Prior to same day credits processed through the ACH network, recipients had to wait at least a day, and often more, to receive the funds.

The new Same Day ACH system which went into effect in September 2016 offers users, banks, and financial institutions the facility of two additional windows for processing credit transactions:

  • The morning window that ends at 10:30 AM ET, with all transactions getting cleared at 1:00 PM
  • The afternoon window that ends at 2:45 PM ET, with all transactions getting cleared at 5:00 PM

These windows make it possible for the speedier movement of funds between accounts. As long as payments are made within the specified time frames, credit transactions are processed the same day they are initiated. In this way, recipients of funds can access the money by the end of the business day.

Conditions for Same Day ACH

To make use of this facility, banks and financial institutions must comply with certain conditions.

  • International transactions are not eligible for Same Day ACH
  • Transactions of value above $25,000 cannot qualify for Same Day ACH
  • A Same Day ACH fee of 5.2 cents per transaction is applicable on the transaction. This fee can help RDFIs recover some of the costs they’ll incur for providing the facility and is paid by the ODFI or bank initiating the Same Day ACH transfer.  

Remember, though, your rates for same day ACH will be higher than the base fee charged to the banks.

Conclusion:  Benefits of Same Day ACH

Businesses, individual consumers, banks, and other financial institutions will find that the Same Day ACH is highly advantageous in many ways.

  • Quick exchange of business to business payments and information
  • Consumers can pay bills even on due dates without incurring penalties for late payments
  • Consumers can instantly move funds between the various accounts they hold
  • Companies can pay hourly wages to their workers and if needed, make emergency payroll payments
  • Employees can have fast access to their salaries and wages
  • Receiving businesses collect payments faster and thus, improve their cash flow processes
  • Goods and services can be bought and sold faster because of the availability of instant finance
  • More economical system for expedited payments and receipts as compared to other options for collecting and receiving funds
  • Consumers can receive payments quickly in times of emergency situations
  • Customers can make quick decisions and take action when managing their finances and investments.

How can your business benefit from Same Day ACH?