Electronic Debits to Post Faster to Accounts

Beginning 9-15-17, a change will occur within ACH Rules, that will allow for electronic debits and e-checks to post to bank accounts the same day they are authorized for payment. This means that account balances may be impacted 1-2 days earlier than before. Please read the following information for important details:

• Because of the rule change, which affects all financial institutions, debits can be processed on the same day they are authorized by you. In the past, ACH transactions (also referred to as Direct Debit, Electronic Check, ACH Debit, etc.) may have taken 1 or more days to post to your account.


• Always ensure that you have sufficient funds in your account before you initiate any type of payment. This includes payments authorized in-person or over the phone, payments by check, and payments where you provide your bank account number. For example, a check you write at a merchant can be converted to an ‘electronic check’ and submitted for payment that same day. Or a payment for flowers you ordered over the phone could be debited from your account that same day. (Please note that pre-authorized payments, like recurring insurance payments or scheduled transfers are generally not affected. These will post normally as designated by the transaction effective date).


• How quickly debits clear your account will depend on how the originator (the company or merchant) sends the item to the bank for processing. Businesses will most likely adopt new processing procedures in a phased-in fashion, so even if you experience no change in September, it is likely that many ACH items will post quicker, i.e. ‘same-day,’ sometime this year.


• TowneBank provides many ways to keep track of your account balance. Online Banking is a great tool to monitor your daily balance, and reflects transactions that are posted/pending to your account. You can also set up ‘alerts’ to let you know when your balance hits a certain threshold.


• Overdraft services* and Coverlines** are available for our personal and business accounts to help you reduce the risk of having insufficient funds.

Have questions? Please contact your hometown banker if you have questions about this rule change.