Have you ever logged into your bank account to check on the status of a payment, only to see that there’s an ACH hold on the funds? What does ACH hold mean exactly when it comes to your banking transactions? We’ll explore the definition below, along with the reasoning behind it.
ACH hold meaning
ACH stands for Automated Clearing House, which is a system enabling the electronic transfer of money between two different bank accounts. If you’ve ever received your paycheck via direct deposit, this is an example of an ACH transaction.
ACH debits and credits require time for processing. If you see that an ACH funding hold has been placed on your bank account, it simply means that the deposit or deduction is pending until the funds have been processed. The bank has been notified of the transaction, but it will take a bit of time until the funds are cleared. When an ACH hold is placed on the account, you can expect the transaction to be complete in short order.
Here’s what the ACH hold process looks like:
Step 1: The ACH entry is sent to your bank.
Step 2: The bank acknowledges the transaction.
Step 3: The bank places an ACH hold on the account.
Step 4: The bank performs necessary checks to make sure funds are available.
Step 5: The money is either deducted or deposited, completing the transaction.
It’s not just traditional bank accounts that use ACH holds. You might also see this with digital wallets that also use the ACH system for electronic transfers, like Venmo.
How do ACH payments work?
To better understand the ACH hold meaning, it’s helpful to take a closer look at how the ACH works. Typical examples of ACH payments include:
Social Security payments
Recurring or subscription payments
One-time debt payments
These are broken down into two categories, including ACH debits and ACH credits.
To set up an ACH debit, you’ll provide checking account information and authorize automatic payments to another bank account. Examples of ACH debits could include recurring payments to utility companies, gyms, or subscription services.
After you’ve provided these details, the bank receives an ACH entry and places a hold on your account until the transaction is processed. This ensures that you don’t spend your funds on anything else until the payment has cleared.
Unauthorized ACH funding holds
Security is at the forefront of the ACH system, and ACH holds play an important role in preventing fraud. What happens if you notice that there’s an ACH hold on your account that you don’t recognize? As with any unfamiliar transaction, you should contact your bank. The hold gives you and your bank a window of time to spot these unauthorized transfers. You’ll see that the money is about to be taken from the account, before it actually happens.
What is the ACH hold check order fee?
There are many different codes used by individual banks, so you might also be wondering “what is ACH hold check order fee?” If you see a reference to an ACH check hold order fee, this probably just means that your bank charges a fee for ordering checks. Most banks charge fees for check orders, so if you’ve paid for the order online it could show up under this type of title. As with any fee, if you’re unsure what an ACH check hold order fee means it’s always worth getting in touch with your bank for clarification.
ACH holds are all part of the process of transferring money using the ACH network. These holds are necessary for banks to ensure that funds are in place before completing transactions, helping create a more secure transfer process.
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