Banks use Automated Clearing House to Transfer Funds Electronically from one bank to another in safe and secure way. In these digital economy people and business firms would like to receive payments through direct deposit. As they find more convenient these method rather than using checks. This electronic transfer of money from one place to another is called ACH OR Automated Clearing House. Whereas wire transfer allows you to move your money from your account directly into the account of someone else.
Letís Checkout the Difference between ACH and Wire Transfer
ACH Transfer – The electronic transfer of funds from bank account to another. Payment transfer is not occurring on real time the transaction is settled on future date.† Transactions are entered with a date to settle which is normally the next day.† Payments are transferred by your banks in groups or batches along with all their other customer’s scheduled payments, usually at the end of the business day. ACH Transfer is less expensive and can be done on batches. ACH cost banks $0.035 per transaction or $0.025 per transaction in bulk. ACH Transfer is given to customers in between $0.10 and $2.50, depending on volume. ACH by definition is meant to be automated, and meant to be delayed settlement, thus the lower cost associated.
Wire Transfer – It is similar to ACH Payments but have some few differences. Wire transfer perform task on real time and cannot be done on batches, performed manually. Wire transfer is more expensive than ACH Transfer. When an individual make wire transfer, both account holders are verified with the exact money in the account. Wire transfers are fast and secure; and since they’re handled individually by the banks.
Transferring funds, either by ACH or wire, is generally safe when using a financial institution. However, if your computer has become infected with malicious software (malware), cybercriminals can steal usernames and passwords and defeat common methods of user authentication employed by financial institutions.