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When you send or receive money online, you’re making an Automatic Clearing House (ACH) transfer. According to statistics provided by theNational Automatic Clearing House Association(NACHA), 7 billion payments were made through the ACH network in the final quarter of 2020 alone.
Critically, the ACH is the largest system through which agencies transfer electronic funds —ACH transfers can include a variety of transactions ranging from paychecks made by direct deposit, bill payments, and transactions made with family and friends.
What are ACH Transfers?
Simply put, anACH transferis an electronic transaction that occurs between two different banks. ACH transfers are processed in batches three times a day. Delivery of ACH transfers can take up to several business days — while banks can choose to have ACH credit transfers completed within either a business day or up to two days, the recipient bank may hold the funds for a certain amount of time. ACH debits must be processed within the next business day.
Typically, ACH transfers are much more convenient and less expensive (if not free) than using a credit card or writing a check. ACH transfers are typically used for:
- Making payments via direct deposit
- Paying utility or mortgage bills
- Making transfers from a bank account to a savings account
- Transferring money to a friend or family member at another bank
It’s important to be aware that there is usually a cap on the funds you’re able to move, daily or monthly.
When Can You Incur ACH Transfer Fees?
There are several ways you may incur ACH transfer fees. For instance, bill payments made through ACH transfers can be expedited, but you will likely be charged for doing so. In addition, your bank might charge fees for transfers that you make to another bank — these are typically $3 but can be as much as $10.
Your bank may also impose a fee if you attempt to make a transfer when there are insufficient funds in your account.
How Can You Avoid Being Charged ACH Transfer Fees?
It’s always best to check with your bank to determine their specific policies concerning ACH transfer fees. However, there are a few basic ways you can avoid these charges. Setting up automatic monthly payments is one way you can prevent ACH transfer fees.
You might also consider using Zelle or a payment app like Venmo to send money to family and friends. Additionally, if you are going to transfer money often, you may want to compare the fees charged by different banks.
If you were deceptively charged ACH transfer fees by your bank or credit union, you may be entitled to join a class action lawsuit. It’s best to speak with an experienced class action attorney to discuss your legal rights and potential remedies.
