Cash is instant when someone pays you. If the transaction is online, you should expect to wait several days before it arrives. Even direct deposits, while quicker, are subject to bank schedules and can take several days for processing. This is largely due to bank policies as well as the Automated Clearing House Network which […]

Cash is instant when someone pays you. If the transaction is online, you should expect to wait several days before it arrives. Even direct deposits, while quicker, are subject to bank schedules and can take several days for processing. This is largely due to bank policies as well as the Automated Clearing House Network which processes everyday transfers.

“The Automated Clearing House essentially is the digitalization in the way checks were processed,” states Peter Tapling, payments industry consultant. He is also the managing director of PTap Advisory LLC. Tapling explains that the ACH Network batch and settles payments multiple times per day.

There are no same-day ACH transfers. However, banks can send them if they wish. This fee could also be charged. Most use cases are for businesses. Based on NerdWallet analysis of ACH transfers, the standard delivery time for consumers to send funds between bank accounts is one-to three business days (weekdays minus banks holidays).

It might not matter if you have savings. If you have to wait a few days for your next paycheck, it can make a difference between paying on time and getting overdrafted or charged late fees.

There are many ways to get your money quicker — some even in seconds — to you bank account.

1. Banks that offer early direct deposits

Direct deposit is available by some banks up to two days before customers. There are no fees and no signup requirements. Banks can send payroll information to employers up to two days prior to funds arriving. This allows banks to push income to your account earlier, knowing that the money is coming.

According to a report by NerdWallet 2021, this service was popularized among fintechs such as Chime, Cash App, and Venmo. They saw spikes of interest during the first wave COVID-19 stimulus payments. It has been adopted by more banks and credit unions since 2021, including large institutions like Pentagon Federal Credit Union, Wells Fargo, Capital One and Wells Fargo.

The “early” part of the direct deposit information is not guaranteed. This is because the timing depends on the employer. A few banks offer multiple checking accounts so the service may be restricted to one account only. Early direct deposit should not be confused with cash advance apps like Brigit or EarnIn. These apps can charge subscription fees and encourage tips for quick access to funds from your paychecks.

2. Zelle allows you to instantly transfer funds between banks

Zelle, a peer-to-peer network, allows transfers to be made instantly and can reach one’s account in as little as a few seconds. Zelle was founded in 2017 by seven major U.S. banks and now has over 1,600 financial institutions. Zelle can be used through the bank’s mobile application. If your bank does not support Zelle, you can use a standalone app to connect your debit card.

Zelle can be used for two main purposes: transfers between family members or friends — such as to reimburse group costs — and transfers among accounts at different banks. Zelle allows you to have two separate Zelle accounts. You can make almost instant transfers between different banks by knowing your transfer limit. Zelle enrollment requires you to link your email address and cell phone number.

Zelle transfers, which are similar to wire transfers, can’t be cancelled or refunded after money has been sent and received. The bank regulations protect you against theft, but you are not protected if someone tries to impersonate a bank employee. Due to its immediate nature, Zelle has seen a rise of scams that has attracted the attention of Congress. More consumer relief may be on the horizon.

3. You can use the P2P app’s instant cash-out feature

Peer-to-peer payment apps such as Block’s Cash App or PayPal, keep the money received in their in-app balance. This makes it impossible to access outside of the app (except for those companies’ debit cards). Cash out money to your bank account free of charge, but standard delivery takes one to three days.

The three apps, Cash App, PayPal, and Venmo, allow you to instantly cash out your balance to a bank account. Or at least in 30 minutes. However, the service is not free or available everywhere. A $100 transaction can be charged $1.75, or 1.75% of its total amount. This service is only available if your bank/debit card participates in instant transfers. Venmo identifies two services that offer instant transfer: Visa Fast Funds or Mastercard Send.

Tapling states that some customers may see the instant cash-out feature, while others don’t. The system makes an intelligent decision based upon availability.

Learn more about Transfer services

These three options could be your best option to avoid the one-to three business day transfer wait. There are many other services that you should be aware.

Transfers to the same bank: These transfers can be instant but both parties must be members of the same institution

Wire transfers are instant transfers that can cost as little as $25 to send and as much to receive. Large transactions such as closing on a house, for example, are best served by wires.

Transfers via the RTP network RTP has been in existence for five years but only 300 institutions are currently network participants. Tapling has not yet seen a consumer-facing service from a bank using the RTP network. However, instant cash-out features at PayPal or Block are examples of third party usage.

FedNow will allow you to transfer money through FedNow. The Federal Reserve plans to launch its instant payment network FedNow by July 2023. A pilot is currently being conducted by more than 100 banks and payment processing companies. However, the Federal Reserve will launch its own instant payment network called FedNow in July 2023. This network will be able to handle large volumes of payments.

Tapling states that both FedNow and RTP are available to federally insured institutions (FDIC and NCUA). “But each financial institution can decide when and how to connect to the network. ”

While Instant Payments aren’t yet available for everyone, peer-to-peer payments apps and early direct deposits might fill in some of the gaps.

More information at Chime

Chime states that Chime is a financial technology company and not a bank. The Bancorp Bank N.A. provides banking services Stride Bank, N.A. Members FDIC .”