September 10, 2020 · Budget, Credit, Retirement, Savings

It’s the First of the Month and a Weekend, So Where Is My Deposit?

Delta Community is in close contact with our valued members every day, whether in-person, online, or via phone. We get lots of questions from members, and we strive to answer them quickly, thoroughly, and honestly. One question about our operations keeps coming up, and it's interesting enough that we wanted to discuss it a bit in this post.

This is a question that we encounter occasionally from members:

When the first of the month is a Saturday or Sunday—or it's a federal holiday—why don't I get my pension (or other) payment until the following business day?

The question above is simple, but the explanation is just a bit more complicated. We need to discuss some organizations, processes, and rules. To get started, we need to explain what NACHA and ACH are and how they operate to transmit funds across the country.

What is the National Automated Clearing House Association (NACHA) and what does it do?

NACHA governs the Automated Clearing House (ACH) network in the United States. ACH is a core component of the U.S. banking system; it's an electronic payment method which is used by almost all financial institutions for many types of secure and reoccurring payments and money transfers. We receive millions of dollars in ACH funds each business day through the ACH network. If you are familiar with the banking terms "direct deposit," "direct payment," or "electronic check"; they are done via ACH. Many employers use ACH to transmit paycheck funds to their employees. ACH can also be used to pay bills and/or obligations such as a mortgage, utility bill, or credit card payment. So, if you set up direct deposit of your paycheck to a checking or savings account, then it's very likely that you are receiving those funds via ACH.

Now we've described ACH, we will explain some details as to how Delta Community receives deposits and makes its payments to members and the rules it must follow for those actions. First, here are some important terms we need to define that help explain the process for sending and receiving funds:

  • Effective Date. This is the date that an ACH notification transmission is sent from the sender's to the receiver's financial institution indicating that ACH funds will follow on the settlement date. While funds may show as "pending" in online accounts, they are not available for use at this time because the actual funds are not available until the settlement date.
  • Settlement Date. This is the date that ACH funds actually "settle" between financial institutions through the Federal Reserve Bank and are deposited into an account. This occurs when the funds arrive from the senders to the receiver's financial institution. Funds become available for use on this date.

After all the explanation above, the short answer as to why we cannot make ACH payments available for use on a weekend or holiday is because the settlement date selected by the sending party (employer, pension fund, or other payer) occurs on a day when the Federal Reserve Bank is closed, which delays settlement until the Federal Reserve Bank's next business day. Delta Community has no control over the settlement date that is stipulated.

Why does Delta Community provide money at only the time of the Settlement Date instead of providing funds before then (such as on the Effective Date)?

Until the settlement date, Delta Community has not received settlement of funds via ACH. If it hasn't received the funds, Delta Community would have to credit the members' accounts in advance of receiving the funds and assume liability, which is not a best practice in the financial industry.

Is Delta Community holding on to my money over a weekend for its own financial advantage?

The answer to the above question is no; Delta Community is not deliberately withholding members' funds because it somehow will benefit from the delay in paying the funds out. In addition to providing exceptional member service, Delta Community, as a not-for-profit, member-owned cooperative, is committed to operating the Credit Union in a conservative, financially sound manner in full adherence to banking regulations and guidance. Our conservative practices and strong financial position enable us to offer consistent, reliable value to our members through various economic cycles and other challenging market environments. If we made the funds available before the settlement date, Delta Community would need to advance the ACH funds on an unsecured basis and assume liability. We believe it is in the best interest of the full membership to post funds on the settlement date provided by the sender once the dollars are disbursed to us.

Is there any way to have payments processed on weekends, so I can get my money faster?

The short answer is not yet, but changes are coming...federal improvements in processing payments are under development now. In August 2019, the U.S. Federal Reserve announced that its banks are developing a new real-time payment and settlement service that will operate 24 hours a day, seven days a week, 365 days a year in the United States between financial institutions, and it will be called the FedNow℠Service. FedNow℠ is expected to become available in the next three to four years.

What else prevents me from getting my money faster?

For members, your savings account number—and only your savings account number—is also your member number; Delta Community savings account numbers and member numbers are always the same thing. It's very important to keep this in mind when setting up direct deposit or connections to other accounts, either within Delta Community or with other financial institutions.

The single biggest difficulty that Delta Community encounters that delays ACH deposits is regularly having to go into our systems and manually correct members' checking or savings account numbers that have been provided for direct deposit.

This manual intervention to change incorrect numbers usually occurs because of one of two reasons:

Either the member's checking or savings account number has been provided incorrectly (one or more digits may be wrong), or the member has accidentally switched their savings account number for their checking account number or accidentally switched their checking account number for their savings account number—for direct deposit. In either situation, the funds are automatically rejected by the account; this is considered an "exception," and our Payment Services team must investigate what has caused the funds to be rejected and then manually correct the wrong number. This manual intervention causes delays in funds being deposited.

To make sure you are providing the correct account number, log in to Online Banking and review the My Accounts section:

  • Select the account you want to review.
  • Click the arrow next to Account Details.
  • You can see the type of account and the MICR number. That MICR number is the account number you need to provide for direct deposit.
  • If the account number has a (-), you only need to provide the account numbers before the dash; the four numbers after the dash are not needed.

If you do not have Online Banking and are unsure of your savings/checking account number, please contact our Member Care Center via our toll-free number at 800-544-3328 or locally at 404-715-4725 for assistance.