Have you ever transferred money from one US account to another and had it arrive the same day? If so, you’re fortunate!
We’ve lost count of the number of times we’ve been asked why bank transfers take so long.
There are two primary reasons transfers take a few days to clear:
- To verify account details and stamp out fraud.
- To help banks to earn profits against your transferred cash.
When first opened, accounts need extensive ID verification, so there seems to be little reason to delay bank transfers for up to a week on already established accounts. Although fraud is a grave issue, it doesn’t impact most account holders.
So, these justifications don’t hold water for many banking customers looking to transfer assets from a high yield emergency fund.
Let’s dive a little deeper into the process behind bank transfers. We’ll take a look at what’s happening behind the scenes.
The Bank Transfer Process Step-By-Step
When you click on the transfer button, you may think you’re immediately transmitting a defined value from one account to the next.
Unfortunately, transfers aren’t this straightforward, particularly if you’re transferring from one currency to another, but luckily you won’t need to worry about knowing how to calculate exchange rate between two currencies, since your bank will likely have that process automated for you.
Here’s how it works when making a transfer:
- The originating bank saves up transactions throughout the day and sends them to a clearinghouse through an automated process in a single batch.
- Next, the clearinghouse sorts through the transfers and moves them to the appropriate receiving bank in a few hours.
- If the receiving bank has funds immediately available, it should, theoretically, transfer them. But the bank may postpone the transfer until at least the next working day.
The delays are just getting started because although there are specific rules for clearinghouses, they don’t apply to receiving banks in the same way.
Your bank could take a good two to four days to decide to release the funds, protected by the three-day good funds model.
This rule ensures that banks don’t honor a transfer from a fraudulent account, but the impact on authentic customers remains considerable.
How To Speed Up US Bank Transfers
So, given this system where banks can retain customer funds for up to a week, what can you do if you have an urgent bank transfer and don’t want to be left waiting?
If you choose to stick with a conventional bank, you can:
- Try and send transfers as early in the day as possible to try and catch up with an earlier clearinghouse transmission.
- Use a checking account with the same bank as your recipient.
- Complain to your bank if a transfer still hasn’t been completed in more than two business days.
The next option is to opt-out of the system altogether and weigh the advantages of a digital money wallet to circumvent these delays (and a good chunk of charges at the same time!).
For many customers, bank transfer delays are part and parcel of sending money within the US, and the prevalence of this service has made it feel like a generally accepted part of the system.
However, there is a far better way.
Here at Cashero we offer instant transfers between users, along with additional features such as:
- Fee-free internal payments.
- Chargeless cross-border transfers.
- Instant transactions.
Cashero offers a comprehensive solution to the frustration of waiting for a bank to take its time processing your payment.
Check out the Cashero account transfer functionality, and prepare to wave goodbye to transfer delays for good.
Content Disclaimer:
As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.
App Disclaimer:
The Cashero App is now available for download in both the Apple App Store and Google Play Store, though not all features are currently functional. Cashero has not yet officially launched.
