September 20, 2019

Getting Your Money Via ACH: Faster is Better


Michael W. Kahn

Michael W. Kahn


image of dollar bill folded into shape of a plane

As a general rule, faster is better. After all, who doesn’t like less traffic, or a plane that lands early? 

By the same token, who wouldn’t want to get their money quicker? That’s why there’s a lot to like about the new rule making ACH credits available in bank accounts sooner.  

The changes took effect Sept. 20 and cover some Same Day ACH credits and other non-SDA credits. Here’s what happened.

First, Same Day ACH. If an RDFI receives ACH credits from an ODFI in the first Same Day ACH window (by noon ET), the money has to be made available by 1:30 p.m. of the RDFI’s local time. And under the existing rule—which isn’t changing—if the ACH credit is received in the second same day window (by 4 p.m. ET), the funds must be made available by 5 p.m. RDFI local time. 

For non-same day credits, the rule now in effect for Direct Deposit (e.g., PPD Credits) is going to apply to credits for all SEC codes. That means when the RDFI has the credits by 5 p.m. the prior banking day, the money needs to be made available to customers on settlement day by 9 a.m. local time for the RDFI.

“Local time” might sound like a simple enough term, but that’s not always the case. The Nacha Operating Rules & Guidelines don’t specify a required method to calculate local time. But there’s a good reason for that: to give RDFIs flexibility to determine what works best. 

Many RDFIs consider local time to be the time zone where they’re located, which is fairly straightforward. But many RDFIs do business in multiple time zones. In those cases, they can determine local time to be the time zone in which specific accounts were opened. Or they could base it on a customer’s address. 

In fact, there may be other acceptable ways of assigning local time. But the method used has to reasonably associate accounts with location details derived from RDFIs’ systems.  

Finally, keep in mind that more enhancements are coming to make Same Day ACH even better. In fact, the next one is barely six months away. Starting in March, the dollar limit for each Same Day ACH transaction quadruples to $100,000. After all, if getting money faster is good, then getting even more money faster is going to be better.