ACH Payments 101
Earnnest utilizes the automated clearing house (ACH) network to move homebuyers’ earnest money payments to the correct escrow account. ACH is a U.S. financial network used to send money electronically and these payments (also called electronic funds transfers) are relied on by the federal government as the standard for secure money movement within the U.S. banking system. An ACH payment is not a wire.
A common payment type
You’re already familiar with ACH payments. Even if the term “ACH” doesn’t ring a bell, many of your every day payments use the ACH network to move money. Common examples include the direct deposit paycheck you receive every two weeks from your employer, or the phone bill and mortgage payment you’ve set to draft automatically each month. ACH payments have become a common option and are preferred to checks or wires because they are faster than checks, cheaper than most wires, and more secure than either checks or wires.
Use in real estate
Using ACH as the payment method in a real estate transaction is beneficial due to the security and convenience. Traditional real estate payment methods, such as checks or wires, open up homebuyers to check fraud and wire fraud. These types of fraud can leave homebuyers with their bank account wiped out and limited options for recovering the funds. ACH payments eliminate check and wire fraud by eliminating checks and wires completely. The convenience of the ACH payment is also a plus. Instead of scheduling a meeting with your real estate agent to hand over a paper check or visiting your bank to initiate a wire, ACH payments from Earnnest can be initiated digitally from work, at home, or on the go!
A secure network
The ACH network is governed by the National Automated Clearing House Association (NACHA). This association exists to regulate the ACH network and requires all parties to meet standards of security, encryption, and identity verification. So you can rest assured that you are using the most secure payment option available to complete your earnest money request.
A few things to remember
The ACH network has a nationally recognized calendar and it’s helpful to know a few key dates when sending funds via the network.
- The ACH network settles payments on business days — but not on the weekend. So if a payment is initiated on a weekend the ACH will not settle until at least the next business day.
- The ACH network honors several holidays throughout the year and payments will not settle on those days. The list of holidays includes New Year’s, Martin Luther King Jr., President’s, Memorial, Juneteenth, Independence, Labor, Columbus, Veterans, Thanksgiving, and Christmas Days.
With the security and convenience of the ACH network, you can say goodbye to checks, wires, and fraud. Start requesting earnest money payments digitally using the Earnnest app.