Online checking can make managing your finances amazingly easy and comprehensive. Consumers are granted access to their accounts 24/7, can transfer money within seconds and manage all their bill payments to help maintain good credit. But how do online checking account transfers work?
Online checking account transfers work on an automated system and everything is done electronically. Multiple accounts within one bank can be linked so transfers can occur within seconds, or multiple banks can be linked making the transaction take only a couple of days.
For example, John has both a savings and checking account through his local bank, called “Bank A.” He has a scheduled bill payment from his checking account, but the money to cover that debt is in his savings account. In situations like that, the electronic transaction can take less than a minute.
Dave is in a similar situation as John. But he has chosen to have checking account with “Bank A” and an online savings account with “Bank B.” The accounts have been previously linked and tested; however, that electronic transfer will take longer because it must be verified through an Automated Clearing House (ACH). Those transactions can take from 2-4 days.
All these transfers work because an electronic link connects the accounts. Once the links between the accounts have been built, established and verified–the electronic transfers can be done quickly and easily.
People can schedule all their payments online and just let the electronic system take care of itself by setting up a standing order with their bank. As long as the funds are constantly being replenished through a revenue stream, such as direct deposit through your work (another type of electronic transfer) you can gain valuable time from not having to go directly to the bank whenever your paycheck is issued.
With the availability of electronic transfers and automated banking systems, balancing your checkbook is an antiquated notion. Sure you need to keep your eye on the bottom line of your transaction account to make sure no overdrafts occur, but by linking your savings accounts to your checking account, an electronic transfer can help save the day. But remember, with all automated systems sometimes there could be mistakes so be aware of all your transactions.