{"id":852,"date":"2011-01-12T06:35:32","date_gmt":"2011-01-12T14:35:32","guid":{"rendered":"http:\/\/www.rentecdirect.com\/blog\/?p=852"},"modified":"2016-12-27T15:44:25","modified_gmt":"2016-12-27T23:44:25","slug":"the-difference-between-ach-and-checks","status":"publish","type":"post","link":"https:\/\/www.rentecdirect.com\/blog\/the-difference-between-ach-and-checks\/","title":{"rendered":"The Difference Between ACH and Checks"},"content":{"rendered":"

Now and then we get some questions about the difference between ACH and paper checks and how quickly those deposits work for property managers.<\/p>\n

ACH transactions are typically faster to clear and far more reliable than paper checks; however, it may not appear that way from a bank statement without knowing more about how the system works.\u00a0 Especially in this day of online banking, one can see pending as well as completed transactions into your bank account.\u00a0 An ACH transaction (initiated by Rentec Direct) will withdraw from a tenants account either the same, or the following business day it is posted.\u00a0 Now, just like a check has to clear, so does the ACH transaction.\u00a0 Rentec Direct (and our affiliated banks) hold the funds until they clear.\u00a0 Most all errors (including bank error, and NSF) return within 3 business days.\u00a0 If an error is returned, you are notified at the time we receive it and no funds transfer.\u00a0 In most cases a property manager is notified about NSF or any other error 24-72 hours after the transaction, which can be up to 2 weeks sooner than a paper check.\u00a0 Provided the funds clear, the funds are then re-transmitted (deposited) into the property managers account.\u00a0\u00a0 This process takes on average 3 business days.\u00a0 A transaction debited on the 1st of a month, depending on weekends and holidays, may show up in a property managers account anywhere between the 10th and 15th of the month.<\/p>\n

So how is this better than a check?\u00a0 The most common question is “if I deposit a check, it deposits the same day into my account, how then is ACH better?”.\u00a0\u00a0 It is a common mis-conception about how paper checks are handled by most banks.\u00a0 Yes, when a check is deposited into an account, it often shows an addition to the balance of the account, and depending on the bank policies sometimes that balance is accessible.\u00a0 The thing is, is that the bank is actually fronting that money, trusting the check is good and holding you responsible for it if it is not.\u00a0 The bank does not know the status of the check that was just deposited for sometimes up to 2-3 weeks, at which time if it comes back as a bad check the funds are withdrawn from your account.\u00a0 Now what if that just deposited check was used to pay the mortgage?\u00a0 And the check bounces 2 weeks later, thereby causing your mortgage check to bounce as well not to mention the overdraft fees.<\/p>\n

Here’s a few additional facts about the benefits of ACH over paper checks.<\/p>\n