6

Why does it take so many days to transfer money between two banks in the US? I have accounts with two different banks in the USA, and whenever I transfer money online between those two banks, it takes around 3-4 days.

When I transfer money, it is debited from my source account instantly. However, it takes 3-4 working days for it to reach the destination bank. I know that the transfer goes through the ACH, but in the interim period, who has the money?

Why do banks want to slow down this process? Why do they want to keep money with them for a longer period of time?

EDIT: How is the situation now since Zelle is implemented?

Jay K
  • 163
  • 1
  • 7

2 Answers2

6

Why? Because they can get away with it, of course. In short - why not?

You may want to read the answers to this similar question (my answer is the one accepted by the OP).

Who has the money? The banks, who else. I have found that some banks are capable of sending/receiving ACH transfers faster than others. I have accounts in two banks, lets call them A and B. If I send money (push) from A to B, it may take several days. But if I decide to pull the money from A to B by originating the transaction through my account at B - the money arrives the next day! So the actual transfer only takes a night, one business day. Its just the direction that matters - if the bank has to give the money out, it will do all it can (including taking 2-3 days for "processing") to keep the money as long as possible. But when another bank charges them - they have no choice but to pay. By the way, bank B behaves better - when I send the money from my account at B, it arrives to A the next day as well.

Try a similar experiment. Instead of originating the transaction at the sender bank - try to originate it at the receiver bank, see how long it takes then for the money to appear on your account after it disappeared from the other one.

Community
  • 1
littleadv
  • 190,863
  • 15
  • 314
  • 526
3

The US (in fact the global) banking industry is subject to Anti-Money Laundering & Counter-Terrorism funding laws, slowing down funds transfer eliminates a great deal of fraud.

Darren
  • 31
  • 1