Moving Payments Faster
Same Day ACH: What is it?
Same-Day ACH is an enhancement to the nation’s current ACH system that allows payments to post to a receiver’s account on the same business day, rather than the next business day. This improvement will be introduced in phases, starting with credits only on 09/23/2016. Debits will be added in the next phase on 9/15/2017.
Phase 1: Credits only effective 9/23/16
Phase 2: Credits and debits effective 9/15/17
Phase 3: Credits must be available for withdrawal by 5 pm effective 3/16/18
Same Day ACH: Understanding the Details
• Every ACH transaction has an “Effective Date,” which is the date you intend the payment or deposit to post to the receiver’s account.Using direct deposit of payroll as an example, the Effective Date is the date that you intend your employees to be paid. This date is essential for accurate payment processing, and it will be key in determining whether or not an entry is a Same Day ACH item. Before Same Day ACH, an incorrect Effective Date would not speed up an entry. With Same Day ACH, a bad Effective Date may trigger an ACH entry to settle on the same day, instead of the next. It is a good idea to go ahead and check your Effective Dates, even if you will not be originating Same Day ACH.
• Every bank that receives ACH transactions must also accept Same Day ACH entries. This ensuresSame Day ACH transactions will be settled on the same day.
• Same Day ACH credits (direct deposits) are limited to payments of $25,000 or less. This limit is not on the total amount of the payroll file, but applies individually to each same-day direct deposit. As an employer, you should understand that you will not be able to make a same-day direct deposit to an individual employee for more than $25,000.
• The U.S. Government will not be participating in Same Day ACH on Sept. 23, 2016. As an employer, you will not be able to send Same Day ACH payments for tax withholdings or other purposes to the U.S. Government. Traditional ACH must be used.
• Same Day ACH cannot be used for international payments.
Same Day ACH: How does it affect you?
• First National Bank & Trust Co. will accept Same Day ACH credits beginning on September 23, 2016. This means that you could receive ACH credits to your account as late as 5 p.m.
• Same Day ACH entries do not look any different. There is nothing to indicate it is a Same Day ACH. They will be posted to your account just like any other ACH you’ve received in the past.
• We understand how important Same Day ACH will be to some companies. Therefore, we will be making improvements to our Business Banking service over the next few months to allow us to offer Same Day ACH services in 2017.
• The traditional ACH services you currently use will continue to be available. We plan to offer Same Day ACH services as an additional option. Look forward to hearing from us when this optional feature is available.
• First National Bank & Trust Co. has controls in place to ensure you do not inadvertently send Same Day ACH transactions until you are setup to do so.
Same Day ACH: What do you need to do?
If you use your own software to create your ACH files, and you plan to send Same Day ACH, please speak with your software vendor about its plans to accommodate this new type of transaction.
• The possibility to receive Same Day ACH entries later in the day could affect your cash position. We offer services that can help you with your cash management needs, such as automatic sweeps and zero balance accounts. Our staff is happy to assist you.
• If you receive ACH payments from customers, review your internal processes and systems to ensure you can properly reflect payment dates as the day you receive them. Remember, you may receive payments more than once a day.
We are happy to assist you. Please stop by one of our locations or call us.
First National Bank & Trust Co. Treasury Management