An ACH transfer also known as Automated Clearing House is an electronic money transfer between banks that allows money to be pulled from an account or to be ‘pushed’ online to accounts at other banks.

An ACH transfer is one of the main ways to send or receive money online.
Automated Clearing House transfers account for the online bill payments you make and the direct deposits you receive, along with other transfers. Here’s a guide to how they work.

Types of ACH transfers

ACH transfers are processed in two ways, which vary in delivery, speed and cost:

• ACH debit transactions involve money getting “pulled” from an account. When you set up a recurring bill payment, for example, the company you’re paying can pull what it’s owed from your account each month.

• ACH credit transactions let you “push” money online to accounts at different banks, either accounts you own or friends’ and family members’ accounts.

How long it takes

Delivery of ACH transfers can take several business days, meaning days that banks are open. Unlike the real-time processing of wire transfers, ACH transfers are processed by a network operator in batches only three times a day.

What it costs

ACH debit transfers, including payroll direct deposits and most bill payments, are typically free. But usually only if you have a checking account and are doing bill pay through your bank.  In essence its not free, because most checking accounts have a bank charge each month. If you need expedited bill payments, there can be fees.

ACH transfers such as bill payments tend to be free, while transfers between linked accounts at different banks are either free or about $3.

For ACH credit transfers, banks might charge a fee of around $3 for sending money between accounts that you have at different banks, but many offer these so-called external funds transfers for free. There’s usually no fee to receive them.

Typically both bill payments and credit transfers to external bank accounts require you to be the owner on both accounts.  

Person-to-person payments that you initiate through your bank or third-party apps such as PayPal can cost a small fee, depending on the platform and payment method. However, most are at least 3% of the monies you are sending out. If your rent is $750 a month, 3% is $22.50 a month.  That is a lot of money.

Trying to send money to others using an ACH is the only way to get money automatically to another. However, as you can see from the above ways it is expensive, unless you are sending the money to yourself.

Here at  Home Buyers Inventory, we set up your ACH through a servicing company.  They are the least expensive way to have your monthly rent distributed automatically. This ensures you are never late, which if you are late comes with a 10% late fee. We want you to avoid that at all cost.  

The ACH the servicing company activates at the same time you sign at the attorneys office, the ACH to pull your rent out of your bank account.  

You complete a simple form that we provide and you provide us a voided check.  The ACH set up fee is a 1x $50 fee, then $20 a month.

Your bank account will be charged your rent and $20 for the ACH fee each month, which makes it easier for you and saves you time.

Helping you get to counting the months until you no longer have to pay rent and on your way to owning your own home!  

Reference: https://www.nerdwallet.com/blog/banking/ach-transfers/