I did an ACH transfer from an account in one bank to another. The money was withdrawn from Bank A on Friday, but isn’t set to be deposited in Bank B’s account until Tuesday.
Where is my money currently?
In: Economics
Either one of the two involved banks. When you transfer money, your bank will take money out of your account, but they haven’t given it to the other bank yet. During this time, the bank is holding the money in its own accounts. Next, your bank transfers the money to the receiving bank, but the receiving bank holds on to the money for a bit before crediting the receiver’s accounts.
The reasons for this are numerous. Most transfers aren’t instant. There is processing time for batch processes to actually transfer money between banks. There are also fraud protections, so banks take time to verify funds before moving it along the chain. Even some instant transfers are really just the banks crediting customers’ accounts until the funds clear. If you deposit a check into your account and you have the money immediately, really the bank is offer you credit for some or all of the value of the check. If the check clears, you get the rest of the money. If it doesn’t, they take the money from your account and your account might go negative if you already spent the money.
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