ACH or Automatic Clearing House is a system for electronic funds transfer (EFT) that facilitates financial exchange between government institutions, business establishments, financial institutions and consumers.
The system helps you to regularly fulfill your payment obligations by authorizing the receiver to automatically deduct payments dues from your debit or credit account. The scheme provides its users a faster, cheaper and more convenient way for their financial transactions, saving them time, money and effort all together.
The ACH system covers most of the normal financial exchanges such as transfer funds, recurring bills, Social Security contributions, and salaries.
Setting it up is easy enough. Go through the following tips to give you an idea how to take advantage of this system.
- Verify whether your bank supports ACH push. The best way to do this is to directly inquire from the bank by calling customer service. Another option is to go on-line and search for list of banks that participates in the system. Also ask whether there is specific information you need to obtain for file transmittal.
- Set up your account online. The most convenient way to manage an ACH account is through online banking. If you don't have an account then you will have to register for one. Call your bank and enroll your account in your back for an online account. Once you have done so, you can easily monitor and manage your account once you've started using the ACH.
- Contact the company or the institution you want to send ACH payments to. Although many companies, banks and institutions are part of the process, it is still wise to inquire whether they accept payments of this kind.
- Inform the institution that you want to set up ACH payments. Once you've verified, you will need to authorize them to issue to you account an ACH debit or credit. Your authorization can be given electronically through the web, verbally through the phone, or written.
For web authorization, you normally would need an electronic account with the company. Log-in into your account and go to the "Billing" or "Payments" section. Find "Automatic" or "Recurring" bills and click on this.
You will need to enter your bank or credit information and the date you prefer the payment to be debited from your account every month. For phone authorization, call the company and ask for the billing department. Tell the representative that you want to pay through ACH for your monthly bills.
Give the representative your bank information and other information, if prompted. Ask for your call's reference number in case any problem occurs in the future. For written authorization, you need to directly visit the company or the institution.
Remember to call first and inquire for any documentation or information you need to bring before going.
Once your authorization is received and validated, your dues will be debited from your account on the date you provided. To prevent problems, always ensure that your account has funds to take care of all the bills you enrolled for an ACH payment