You can use various methods to transfer money to other banks using your bank account, and the ACH transfer method is one of them. You can also use other methods such as Wire transfer or direct deposit. For wire transfers, you can use money transfer agents such as Wise, Zelle, Western Union, and MoneyGram, among others. An ACH transfer is slower than wire transfers, but experts argue that it is more secure. I will give you the list of banks that accept ACH transfer.
ACH means Automated Clearing House. It is an electronic bank transfer method that facilitates funds transfer, just like Visa, Mastercard, or American Express. The important to note that ACH transfers happen within the US under the management of Nacha, which was initially called NACHA (National Automated Clearing House Association). It is also known as the ACH network or ACH scheme. The transfer method is so old that it also existed in the 1970s.
The ACH payments usually involve two categories. These are Direct deposits and direct payments. Direct deposits cover payments from businesses and government to consumers, while direct payments can be payroll, government benefits, employee expense reimbursement, tax and other refunds, interest payments, and annuities. Direct payments refer to transfers to payments made by individuals or organizations when purchasing something from a business.
What are the types of ACH transfers?
ACH types should not be confused with ACH categories that I have just discussed above. We have two types of ACH transfers which include the following.
- ACH credits
- ACH debits
For the ACH credits, money is deposited into your bank account from another account. That means your balance shifts upwards. You can arrange for an automated ACH credit transfer from your employer or government agencies.
On the other hand, ACH debits refer to ACH transfers from your bank account. That means your balance shoots downwards after such a transaction. You can allow automatic monthly payment from your account to your water supplier, Electricity Company, or internet Service Company every month so that you do not have to initiate the payment manually. That way, your account will be debited.
In other words, ACH credits involve funds being pushed into an account, while ACH debit means that funds are being pulled out of an account. When carrying out transfers using either type, you transfer money using the recipient’s routing number and account number.
How long do ACH transfers take?
ACH payments may take three days or more working days to complete. Various reasons determine the time you will get your funds. The time of the day you submit your transfer request determines the time taken for an ACH transfer to complete.
For example, if you submit your request past the working hours of a bank, the transaction request will appear as initiated the following day. Likewise, if you initiate a transfer on a weekend, your transaction processing will begin next Monday.
The currency used may also affect the ACH transfers to a big extent. If you use a domestic currency to move your money, then there is a possibility that the transfer will complete faster and vice versa.
Is ACH faster than wire transfers
Not really. ACH transfers are slower compared to wire transfers. However, they are a bit secure. The wire transfers are instant, meaning that once you move money from your account to another bank’s account, the funds move to the account immediately.
Therefore, the funds are not reversible. That is why people argue that wire transfers are not as safe as ACH transfers because you cannot reverse a transaction. You are done unless the recipient returns the money if you transfer funds to the wrong account number using wire transfers.
ACH transfers stay pending for some time, and during that period, you can decide to cancel the transaction. The time the funds stay pending gives the concerned officials time to review the transfers. Despite being slow, ACH transfers are the best to transfer money to someone else’s bank account because of the security involved.
What are the benefits of ACH transfers?
There are various benefits of ACH transfers that you may not get with other types of money transfers. They include the following.
i) Low cost
Banks charge low fees on ACH transfers. Some other institutions may not charge you any money to transfer money via an ACH. The median internal cost for ACH payment processing is $0.29. Therefore, you will be able to save a substantial amount of money that you could have wasted with other transfer methods. ACH transaction costs for large amount transfers are usually low compared to low amount transfers.
Just as I have mentioned above, ACH transfers are secure because they pass through the clearinghouse. The time is taken for the transaction to complete also allows you to cancel any wrong transaction. That way, you can save money that you would have lost if transferred to the wrong recipient.
iii) Open to anyone
ACH transfers are open to anyone in the US. Consumers and businesses can use the transfer methods to avail money to the intended account.
Despite being so good, ACH transfers take a long time to complete and may not be suitable to transfer funds for emergency cases.
What are the significant differences between ACH and wire transfers?
There are differences associated with the two types of transfers. They include the following.
- ACH transfers take several days to complete, while wire transfers take place in real-time. As soon as you initiate the transfer, the recipient can get their funds without waiting for long. Some financial companies can accept ACH payments instantly once the clearing house releases the funds to them. A good example is Cash App which avails money as soon as they receive them.
- Wire transfers are expensive compared to ACH transfers. You can pay $25 per transaction when carrying out a wire transfer. International transfers can even cost more than $25. On the other side, ACH transfers attract low fees.
- Wire transfers are directly handled by banks themselves, while the Automated Clearing House carries out ACH transfers.
- ACH transfers are more secure compared to wire transfers.
Can I use an ACH transfer to move money from a prepaid card to a bank?
Prepaid cards allow you to move money to a bank account. But can you transfer money from a prepaid card to a bank account using the ACH transfer method? Well, since a prepaid card is taken as an independent bank, you can transfer money from a prepaid card to a bank account using the ACH transfer method.
You may be wondering what a prepaid card is. A prepaid card refers to a payment card that allows you to recharge money and use it for various transactions. The card does not connect to any bank account whatsoever. However, you may add it at will. Prepaid cards operate the same as debit cards, although debit cards must link to a checking account of a bank or credit union.
The List of banks that accept ACH transfer
Various kinds of banks support ACH transfers. The following are banks and some credit unions that support ACH transfers. Most of them offer free online checking accounts with no opening deposits or credit checks. Have a look list of banks that accept ACH transfer.
- Bank of America
- Bank of the West
- BankPlus (MS)
- Bank of the Ozarks – Personal
- Bank of the Cascades
- Union Bank & Trust (WI) – Personal
- Union Bank & Trust Company (NE) – Personal
- BBVA Compass
- Bank of America
- Bank of the West
- Bluebird by American Express
- BankPlus (MS)
- Bangor Savings Bank
- Beneficial Bank – Personal
- Capital One
- Charles Schwab
- Citizens Bank
- Dubuque Bank and Trust
- Denison State Bank
- First Tennessee
- First Hawaiian Bank
- First-Citizens Bank
- Gate City Bank – Personal
- Golden Plains Credit Union
- Gulf Coast Bank & Trust Company – Personal
- Glens Falls National Bank and Trust Company – Personal
- German American Bank – Personal
- Huntington Bank
- HR Block Emerald Card
- Heritage Oaks Bank
- IH Mississippi Valley Credit Union
- IU Credit Union (Indiana University)
- Illinois Bank & Trust – Personal
- Inwood National Bank
- Jacksboro National Bank
- Liberty Bank (CT) – Personal
- Liberty Bank and Trust – Personal
- Nevada State Bank – Personal
- Navigant Credit Union
- Old National Bank
- Ocean City Home Bank
- Police and Fire Federal Credit Union
- Potlatch No 1 Federal Credit Union
- Pioneer Federal Credit Union
- Pen Air FCU
- Pinnacle Bank (TX) – Personal
- PrimeWay Federal Credit Union
- Skylight Visa Prepaid Debit Card
- SAFE Credit Union (CA)
- State Employees Federal Credit Union
- San Francisco Fire Credit Union
- Service Credit Union
- Schools Financial Credit Union
- Southside Bank of Tyler, Texas
- Scott Credit Union
- TD Bank
- Teachers Credit Union (IN)
- US Bank
- Union Bank
- Umpqua Bank – Business
- Union Bank & Trust (VA) – Personal
- United Heritage Credit Union
- Velocity Credit Union (Austin, TX)
- Vantage West Credit Union
- Valley National Bank (NJ)
- CA Valley First Credit Union
- Valley State Bank (Syracuse, KS)
- Wells Fargo
- Walmart Prepaid MoneyCard
- Webster Bank
- Wood & Huston Bank
- Westbury Bank – Personal
- The Washington Trust Company
- Xenith Bank – Personal
- Xceed Financial Credit Union
- Xplore Federal Credit Union
- Zeal Credit Union
ACH transfers refer to the Automated Clearing House. It is an electronic money transfer system that allows money transfer from one bank to the other. ACH transfers are cheaper compared to wire transfers. However, they take a long time to complete and are cheaper compared to wire transfers.
Again, ACH transfers are secure compared to wire transfers. While the Automated Clearing House handles ACH transfers, wire transfers are handled by the concerned banks.