Same Day ACH-Frequently Asked Questions
This document is intended as a resource for Bankers Trust customers to better understand Same Day Automated Clearing House (ACH) processing. Bankers Trust is providing this information to help you understand the upcoming rule change and its offerings.
Information for Consumers
Starting September 15, 2017, a change in the way payments are processed through the Federal Reserve will allow payments to go through on the same day. This is called Same Day ACH. Currently, most ACH payments are settled on the next business day after submitting them. With Same Day ACH, a written check could be deducted from your account the same day you write it. Previously, it might have taken 2-3 days to post to your account.
Same Day ACH can benefit businesses and consumers in several ways, including:
- Expedited Bill Payments — enables consumers and businesses to make on-time bill payments on due dates with participating billers, and provides faster crediting for late payments
- Account-to-Account Transfers — providing faster crediting for consumers and businesses that move money among their various accounts at different financial institutions
- Same-Day Payroll — supporting business’ needs to pay hourly workers, and providing flexibility for late and emergency payrolls and missed deadlines; and enabling employees to have faster access to their pay in these cases
- Business-to-Business Payments — enabling faster settlement of invoice payments between trading partners with remittance information
WHAT CONSUMERS SHOULD KNOW
- A merchant or biller may offer you the option to make a same-day payment, or state that they intend to collect the funds “as quickly as possible.” When you authorize a merchant or biller to debit your account, they should inform you about the timing of the payment.
- If you have pre-authorized an electronic payment, such as a recurring mortgage or insurance payment, there should be no change to the time these payments are posted to your account. Bankers Trust will receive and post these payments according to the transaction effective date you have set.
- You can avoid overdraft or insufficient fund fees by making sure you have sufficient funds in your account to cover every payment you make, authorize, or initiate.
Please take these new Same Day ACH rules into consideration when you write checks or have ACH debits deducted from your account. Bankers Trust has no control over when ACH files are received and it is your responsibility to ensure funds are available in your account to cover any payments you authorize.
If you have questions about how Same Day ACH may affect your payments, or if you are a Business or Commercial customer interested in originating Same Day ACH, please call us at 1-800-362-1688 and we will be happy to assist you.
Q: What is Same Day ACH?
The Automated Clearing House, or ACH, is essentially the way banks, credit unions and businesses move money between accounts. Same Day ACH is an improvement to the ACH network. It allows both credit and (beginning September 15, 2017) debit transactions to be processed several times daily, resulting in same-day processing and settlement of ACH transactions.
Q: What’s changing?
Credit transactions are already posted multiple times per day but debit transactions are posted to accounts only once per day. Beginning September 15, 2017, debit transactions will also be processed multiple times per day.
Q: How does this affect me?
Beginning September 15, 2017, you will begin to see checks clearing (only checks converted to ACH) and bill payments post to your account(s) several times each business day instead of just once daily. This is similar to when you make purchases with your debit card and your account immediately reflects the pending authorization.
Q: What are the benefits of Same Day ACH debits?
All consumers, businesses, government entities and financial institutions using the ACH Network will realize several benefits as a result of Same Day ACH debits. First of all, you will have access to more frequent and accurate information about your available account balance each day. The conversion to Same Day ACH debits also enables you to make easier on-time bill payments and faster crediting when you are moving money among your accounts at different financial institutions. Similarly, business-to-business payments will process more quickly, resulting in faster invoice and payment processing.
What new service is Bankers Trust offering?
In early 2017 Bankers Trust will begin offering Same Day ACH Origination for credit only. We began accepting Same Day ACH credits in the fall of 2016 and we are now adding to this functionality by offering the ability for our customers to begin origination of Same Day ACH Credits only.
What is Same Day ACH?
Same Day ACH offers an option to consumers, businesses, and governments that want to move their money faster. It is an immediate action that financial institutions have undertaken to modernize the payment system, which creates a building block for a variety of products and services.
Same Day ACH will build upon existing next-day ACH Network capabilities and establish a new option for same-day clearing and settlement via ACH.
Under the Rule, two new Same Day settlement windows will be added to the ACH Network, increasing the number of settlements between financial institutions from once each day to three times each day. The Rule requires that, on September 23, 2016, all Receiving Depository Financial Institutions (RDFIs) receive same-day transactions and provide faster funds availability to customers. Bankers Trust is pleased to offer Same Day ACH as a valuable service to allow you to receive payments faster.
When does this go into effect?
Same Day ACH will be implemented in a phased approach as outlined below:
- Phase 1: September 23, 2016 – Acceptance of incoming Same Day ACH Credits and non-monetary entries ONLY.
- Phase 2: April 1, 2017 – Origination of Same Day ACH Credits
September 15, 2017 – Receipt and Origination of both Same Day ACH Credits and Debits
- Phase 3: March 16, 2018 – Mandatory 5 p.m. deadline for availability of credits.
Are there fees associated with this service?
Yes, in order to cover processing costs, there will be a per item originated fee for Same Day items.
Does Same Day ACH affect all credits and debits?
Eventually, yes. Phase 1 only affects credit transactions. Phase 2 will add the ability to process both credits and debits, as long as they meet specific criteria, which are outlined in an additional section below.
Are there limitations to the type of transactions that can be sent via Same Day ACH?
Yes, there are dollar limitations, SEC Code restrictions, and non-monetary restrictions on Same Day ACH. These limitations and restrictions are defined below:
- Transaction Limit: $25,000
- The over $25,000 value limit applies to a single item. In all three Same Day ACH implementation phases, no single item over $25,000 will be eligible for same day settlement.
- In phase 1, only credit items are eligible for same day settlement. No forward debits of any kind will be eligible for same day settlement. Any forward debit item(s) submitted in a batch that is processed as same day will be processed but will settle the next business day, whereas the credit items will settle the same day.
- Eligible SEC Codes for Monetary Transactions:
- All except IAT
- Eligible Non-Monetary (Zero Dollar) Transactions:
- Notifications of Change
- Death Notification Entries (DNE)
- Remittance Information (CCD or CTX)
- Note that Automated Enrollment Entries (ENR) are NOT eligible for same-day processing
- Customer must gain prior approval with Bankers Trust for Same Day ACH Origination Services
- Receipt of Same Day ACH is mandatory and requires no prior approval
- Federal Government Payments Exclusion:
- At this time, the Federal Government will not be participating in Phase 1 of the Same Day ACH implementation. Therefore, any forward entry originated from, or received by, the Federal Government will not be eligible for same-day settlement and will continue to settle on a future date regardless of submission date and time. Information regarding the Federal Government’s participation in later implementation phases will be forthcoming.
Is Same Day ACH a unique offering by Bankers Trust?
No. All financial institutions are required to receive Same Day ACH payments and provide credit for same day transactions beginning September 23, 2016. Same Day ACH Origination is optional.
What changes will customers need to make to ACH files and transactions?
Bankers Trust encourages customers to fully understand what identifies an ACH transaction as Same Day to ensure we process your transactions as you desire. To ensure your transaction is processed properly and that unwanted Same Day ACH fees are not incurred, please make certain you have the appropriate Effective Entry Date.
How are Same Day ACH Transactions identified and what role does the Effective Entry Date have in the file transmission process?
- Same Day ACH items will need to use a specific Originating ID different from standard ACH items.
- Same Day Entries will be identified based on the effective entry date and the time sent to the ACH Operator.
- Files with a current-day effective entry date, received prior to the deadline, will be considered Same Day ACH transactions.
- Coding the field with one or two days following “today’s” date indicates “classic” ACH settlement.
- NOTE: If the payment contains a stale (i.e. old) or invalid date in the Effective Entry Date field, the payment could be processed in the next available window, which could be same day or next day.
What will I need to do?
Bankers Trust customers will need to follow a few steps to prepare for Same Day ACH:
- Request Same Day ACH Origination Services through your Bankers Trust Treasury Sales Officer.
- Be pre-approved for Same Day ACH Origination Services prior to use.
- Use a separate Originating ID to send all Same Day ACH Transactions.
- Use the appropriate Effective Entry Date.
- Send files within the Same Day ACH cut-off times.
- Understand that applicable fees will apply.
How will Bankers Trust communicate about Same Day ACH?
In addition to providing this Q&A document, Bankers Trust will communicate with you about Same Day ACH in a variety of ways, including on the Bankers Trust website, within Business Internet Banking, and via email.
What are the benefits of Same Day ACH?
There are several benefits of Same Day ACH. In most cases, Same Day ACH cost would be lower than other traditional payment methods such as wire transmission. This service will also allow customers to move money more quickly when needed within that same day. For example, emergency payroll or same day bill payment.
What are the submission deadlines for processing Same Day ACH?
The origination of all Same Day ACH files, transactions and batches must be received by 11 a.m. CT to process as a Same Day.
When will I see the posting for any Same Day ACH Transactions to my account?
- In Phase 1, RDFIs must have eligible entries posted by end-of-day in their own time zone.
- In Phase 3, RDFIs will be required to provide funds availability at 5 p.m. local time for Same Day credit entries.
When will funds be available for use?
Beginning in Phase 1, RDFIs should provide end-of-day funds availability for all Same Day credit entries received. Phase 3 will require RDFIs to provide funds availability at 5 p.m. local time for Same Day credit entries.
How will returns and NOCs be handled?
RDFIs will not be required to process returns on the same day that the forward entry is received. The existing return timeframe will still be applicable. RDFIs will have the option of using any of the available settlement windows for returns, as long as the existing return timeframe is met.
What type of transactions are good candidates for Same Day ACH?
- Emergency payments
- Off-cycle disbursements and corrections or payouts
- Time sensitive payments
- Account transfers
- Errors/payment re-initiation, etc.
- Expedited credit ACH receipt
- Debit ACH collection
- Error correction
Who do I contact if I have questions regarding Same Day ACH?
Please contact either your Account Officer or Electronic Banking at 1-800-626-5761 or firstname.lastname@example.org.