You may see your paycheck appear in your bank account a bit faster in 2016.
According to the National Automated Clearing House Association (NACHA), the organization that oversees the automated clearing house (ACH) network, major U.S. financial institutions are on course to offer to same-day ACH payments beginning Sept. 23
That’s the day a new rule requiring financial institutions accept same-day online bill and person-to-person payments is set to goes into effect (more on that later). But, NACHA said, a majority of these major players plan to extend similarly speedy payment services to their business customers as well. Per a survey it conducted in January, 100% of the top 25 ACH-originating financial institutions are planning to offer same-day payroll payments and 95% are planning to offer same-day business-to-business payments by the end of the year. An overwhelming majority (86%) plan to offer these services to all their customers, while the remaining 14% will offer them to select clients based on need.
The move could mean you’ll see your paycheck deposited into your bank account a bit sooner than before — on the same day the payment is originated, NACHA said.
Fixing the Payment Hold Up
Electronic payments currently get batched and processed through the ACH network as a one-time, next-day settlement. The process is designed to avoid unnecessary money transfers from bank to bank within a 24-hour timeframe, but it can cause transactions, including online bill pay, to get delayed. Back in 2015, the Federal Reserve approved the same-day ACH payments rule set to go into effect this September in an attempt to speed up the system. (It essentially adds more batches to each day, allowing payments to get processed in a more timely fashion.)
Earlier payroll deposits, coupled with the quicker online bill pay, could help prove helpful to folks struggling to pay certain bills on time. Remember, a late loan payment is one of the quickest way to damage your credit. And unpaid bills that enter collections can also damage your score. You can minimize the odds of making a late payment by setting up auto-pay or signing up for alerts that let you know your balance is soon due. You can see how your current payment history is affecting your credit by viewing your free credit report summary, updated every 14 days, on Credit.com.
More on Managing Debt:
- The Credit.com Debt Management Learning Center
- How to Pay Off Credit Card Debt
- The Best Way to Loan Money to Friends & Family