Bank transfers have always been a headache for people especially due to the numerous kinds of transfers that exist right now. People find it tough to decide and differentiate between ACH and Wire transfers and which one should they use to run their small businesses. ACH vs Wire transfers have been a cause of concern for many business owners and we are here to answer your doubts today.
WHAT IS ACH?
The Automated Clearing House Settlement is not done on the same day but a date is issued as to when the settlement has to occur, which is the next day most of the time. When the bank opens for the next day, they receive a statement which they continue to process. Most of the process in this is automated and is completed very fast. The cost of processing is also very low because they are processed in bulks and the cost is mostly around $.10 at the max depending on the volume of the transfers. This transfer is used for salaries and for recurring payments.
WHAT ARE WIRE TRANSFERS?
Wire transfers are done for same day transfers but this transfer is done manually by bank employees and therefore could be less safe. This method is generally used when there is an urgent need for the settlement to occur and should be filed within a limited period of time so that the bank can process it within the same day. The cost of processing is generally higher due to the manual labor and could cost you about $6 to $30, to go through with the transaction.
One added bonus of the ACH mode of payment would be that they can be used for both making and requesting payments whereas the less safer wire transfers can only make payments. ACH should be the more preferred method of cash transfer unless in the case of an urgent scenario.